With the 2019 tax year coming to a close, ISA's are all the rage with a 'use it or lose it' slogan often attached. Rightly so, ISA's are a tax-efficient means of investing - the bigger your ISA pot the better. In most cases, they're incredibly flexible. You can invest for income, withdraw lump sums almost on demand and there is a variety of specialist ISA's to help you with your first home or cash investments. Each year you have a £20,000 ISA contribution limit which for most is more than enough, but as the tax year closes you may want to look at your available cash or funds already invested and use some if not all, of your ISA allowance. (If you have an adviser, they should be doing this for you.)
In the case of Small Business Owners - You have to have taken the income from your business first before investing in your ISA, thus paying the income tax on it. This is not the case with your Pension. Each tax year you're able to contribute either equal to your annual earnings or your pension annual allowance (£40,000) whichever is lower and unlike your ISA there isn't any income tax to pay first of all before investing with-in your pension. Before the end of the tax year, you can sit down with your accountant to see if it's a viable option to invest some of this year's profits within your pension. Even better, because this then reduces your profits for the years it also reduces your corporation tax. Pensions are a great 'tax-deferral' investment wrapper for small business owners that also offer a variety of investment options. Speak to your adviser or contact me directly if you have any queries.