Pension Advice - Mid 30s

ozzage

You can do a SIPP. It's not even a company scheme it's just for you personally and then you make company contributions.

greensmoker

so what's more advisable, to set up a company scheme pension or a SSIP for myself and my husband?

Also just want to double check - if I go for the SSIP option and the money goes straight from the business to the pension, I do not pay tax or NI on that amount and it's reckoned as a business expense?

Thanks in advance

ozzage

I would just do a SIPP. I can't see any point setting up a company scheme, but then I've never done it I pay from my limited company directly into my SIPP.

To re-cap, if you set up a SIPP each for you and your wife (assuming you are both directors or employees)
1. You and your wife will not pay income tax or employee's NI
2. Your company will not pay employer's NI
3. Your company will not pay corporation tax as it's a business expense and therefore reduces your profit

greensmoker

I've just been talking to a friend and she is self employed. Are the rules the same for self employed? or do they have to pay NI on their full salary?

atush

Pretty sure you have to be an LLC but not sure. After all, it needs to go thru the Co so the money isn't in your hands as once it is it gets taxed.

as for Nics, SE pay lower Nics so she don't have as much to gain.

Have you asked your accountant?

greensmoker

I'll have to get more details off her, I don't know.
Thanks for your answers anyways.

Another question: Can I put in a different amount into my pension each month - depending on the income of the business? Or must it be a fixed amount each month?

greensmoker

Hello,
From the responses above I understand that paying money directly from a business saves NI - both on the part of the employer and the employee.

However, I have been looking on the government website and it does not seem to be the case: https://www.gov.uk/income-tax-reliefs/pension-contributions-tax-relief
Here it says clearly that you do pay NI. Please correct me if I am wrong - I hope I am!

Thanks in advance!

Triumph13

greensmoker wrote: »

Hello,
From the responses above I understand that paying money directly from a business saves NI - both on the part of the employer and the employee.

However, I have been looking on the government website and it does not seem to be the case: https://www.gov.uk/income-tax-reliefs/pension-contributions-tax-relief
Here it says clearly that you do pay NI. Please correct me if I am wrong - I hope I am!

Thanks in advance!

You are indeed.

You pay NI on employEE's contributions, but not on employER's ones.

If the comapny pays you and you contribute then NI is payable. That's why the other posters are recommending that the Co pays the contributions directly as employer's contributions. Simples.

greensmoker

Thanks so much for your response.
My situation is that my husband and myself are both directors of our limited company. Since we are not employees of our own business - would this mean that our pension contributions would be classed as "employers contributions" and therefore not involve NI?
Also is there any limit to the amount an employer can contribute to the pension scheme?

atush

Correct, all contribs are employers contribs so no NI for either.