Multiple income sources – what are the limits

GandalfTheTight

If I earn £20k from one company (company A) as PAYE
I take £40k from another company (company as a Dividend

Can company B put £20k into my personal pension?
Can company B put £50k into my personal pension?

What are the limits?

Thanks for any input

GTT

dunstonh

£50k is the annual allowance (although carry forward may allow more).

If company B is your own company (as in you being the shareholder and worker) then you can effectively pay in what the company can sustain. If it is not your company and you. If you are just a shareholder and not a worker then they cant pay anything. If you are a worker but no the key worker then you can pay an amount which is reasonable for the position you hold within the company. This is left to the discretion of the local tax inspector.

For example, a spouse who is a director but only does minor clerical jobs it unlikely to get away with £50k. Although 20k-£25k would likely pass without issue.

GandalfTheTight

dunstonh wrote: »

If company B is your own company (as in you being the shareholder and worker) then you can effectively pay in what the company can sustain.

I am a 50% shareholder with my wife.
What is the definition of ‘worker’ - I.e. neither of us get paid through PAYE only dividends. How do they know who does any work?

Thanks

GTT

dunstonh

How do they know who does any work?

If the tax inspector decides to look at your case and asks you what you both do in the company, how would you answer?