Company Pension Contributions

Notlob

Hi,

The company I run pays a small amount into my SIPP each month. This was originally done under a salary sacrifice arrangement a long time ago.


I think it is about time that the company increases the contributions. However, I only receive a salary just above the Personal Allowance. Two questions:-

1. If a company makes pension contributions, do I need to worry about my own income level when determining the contribution?
2. Do I need to further sacrifice my salary equal to the company's contribution, or can I simply just increase the contribution and not reduce the salary?

Regards,

ozzage

If it's your own company, then why do any salary sacrifice at all? You can contribute from your company funds as a company expense without the employee needing to "give up" anything.

Your company contributions are not limited by your salary, just by the total annual contribution allowance (£215,000 or thereabouts).

Notlob

ozzage wrote: »

If it's your own company, then why do any salary sacrifice at all? You can contribute from your company funds as a company expense without the employee needing to "give up" anything.

Your company contributions are not limited by your salary, just by the total annual contribution allowance (£215,000 or thereabouts).

Thanks for the reply.

Is it really as easy as that! No entry on the P11D re the NIC benefit?

I thought HMRC would insist on some sort of quid pro quo to manage the tax avoidance issue.

Notlob