Welcome to Read & Co.

Whatever your needs, we can help.Read & Co. is a firm of Chartered Accountants with offices in Martock, Somerset and Sherborne, Dorset offering accounts, taxation and business advisory and support services to a wide range of businesses and individuals.

At Read & Co Chartered Accountants we provide a cost-effective, high value solution to meet all of your financial needs. We work hard to get to know you in order to deliver timely, individual advice on how to improve your business and personal wealth.

To find out more about how we can help you and your business click here for an overview of our services. To find out more about us click here. To access a wealth of information visit our resource centre or view our free factsheets.

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The current hot topic

Year end tax planning

The run up to the end of the tax year is an excellent time to review your affairs and to consider year end tax planning issues. For example have you utilised your:

  • capital gains tax annual exemption?
  • inheritance tax exemption for gifts?
  • annual Individual Savings Account investment limit?

Don't delay as these reliefs generally have to be used in the tax year.


This is the usual time of year that individuals consider making additional pension contributions and this may be more important this year as significant changes are about to come into force for the pension regime. These changes to the rules take effect from the start of the new tax year and for those affected action needs to be taken before 6 April 2014.

These rules will reduce:

  • the annual allowance (AA) from £50,000 to £40,000 per annum. So you (or your company) may wish to make additional pension contributions for 2013/14.
  • the lifetime allowance (LA) from £1.5 million to £1.25 million so you may wish to take action to protect your LA.

Read on if you would like further information on the AA and LA and please do get in touch if you would like any further advice on this or any other issue.

Further information on the Annual Allowance (AA)

There is an annual limit for giving tax relief on pension contributions which is known as the annual allowance (AA) and is currently set at £50,000. Contributions paid in excess of this limit can, in some circumstances, give rise to an income tax charge on the individual member of the pension scheme whether they personally made the pension contribution or it was made by their employer.

To allow for individuals who may have a significant amount of pension savings in a tax year but smaller amounts in other tax years, a carry forward of unused annual allowance is available. The carry forward rules apply if the individual's pension savings exceed the annual allowance for the tax year. The AA for the current tax year is increased by the amount of the unused annual allowance from the previous three tax years.

The unused AA carried forward is the amount by which the AA for that tax year exceeded the total pension savings for that tax year. This effectively means that the unused annual allowance can be carried forward for the next three years.

Importantly no carry forward is available in relation to a tax year preceding the current year unless the individual was a member of a registered pension scheme at some time during that tax year.

For the tax year 2014/15 the AA will be reduced to £40,000. You may therefore wish to consider making additional pension contributions (either personally or via employer contributions) before the reduction in the AA. However please be aware that any brought forward AA for the period up to 5 April 2014 will be capped at £50,000 per year.

Further information on the Lifetime Allowance (LA)

There is also an overall limit on the total amount of tax relieved pension savings that an individual can accumulate over their lifetime. This is known as the lifetime allowance (LA) and is currently set at £1.5 million. 

Generally when an individual starts to take their benefits from their pension scheme, accumulated pension savings in excess of this lifetime allowance are taxed at 55% if taken as a lump sum or 25% if taken as pension income. For the tax year 2014/15 the lifetime allowance will be reduced to £1.25 million.

Fixed and Individual Protection

For those who believe they may be affected by the reduction in the LA the Government has announced a measure of flexibility in protecting pension savings.  A transitional 'fixed protection' (FP2014) regime has been introduced which entitles an individual to a lifetime allowance of £1.5 million.

Applications for this protection need to be received by HMRC before 6 April 2014 so you need to act quickly if this is likely to affect you. One further key point to be aware of is that any new pensions savings made by or on behalf of the individual from 6 April 2014 are likely to lead to the loss of this fixed protection.  Ordinarily, this will mean that the individual has to opt out of active membership of all registered pension schemes of which they are members.

The Government announced that they are introducing an individual protection (IP14) regime in addition to FP2014.  This will provide an individual who has pension savings between £1.25 million and £1.5 million as at 5 April 2014, with a personal lifetime allowance as at that date.  In contrast with FP2014 further pension savings can be made, although when benefits are taken any pension savings above the individual's personal lifetime allowance, as at 5 April 2014, will be subject to either the 55% or 25% charge mentioned above. Applications for this protection can be made within a three year period from 6 April 2014.