Don't be misled on tax relief

Click to follow
INSURANCE salesmen are trying to drum up business by persuading the self-employed to pay personal pension premiums by 1 July on the pretext that their tax bills will be hugely reduced, writes Sue Fieldman.

Self-employed pension premiums paid during the year ended 5 April 1994 will qualify for full tax relief.

If you pay into a personal pension scheme you can ask for the payment to be treated as having been made in the previous tax year. But you must make the claim to backdate tax relief by 5 July.

You can write to the tax inspector before that date.

Peter Ford, a partner in the pensions department of the solicitors Nabarro Nathanson, says: 'For the vast majority it is too late to pay a premium now for 1992-93.'

You can reduce your July tax bill by telling the Revenue you intend to pay a personal pension premium before 5 April 1995 and elect to carry back the premium to 1993-94.

Looking for credit card or current account deals? Search here