Small company pension help

mandy15_2

Hi I have been reading this thread for a while now and have been very impressed with the information given out so wonder if anyone could help me.


I own a small company employing just me the only shareholder, and I do my own accounts etc. To be tax efficient I pay myself a salary of £10000 per annum and a dividend of about £20000 depending on how the business has done. I have no pension provision and am currently 47 years old. I have the following questions:


1) As I only earn £10000 per annum am I restricted to putting £3600 into a pension for tax relief? Can this be a SIPP or should the company organise one through the auto enrolment scheme?


2)Can the company also put money into a pension for me - would this be a benefit in kind? Can the company only match my payments or make payments of 5% or 10% of salary or can it pay any amount in ie could the company pay in £10000 and reduce my dividend to £10000? I don't know if there are any restrictions or what any tax implications might be.


Thank you to anyone able to offer any help

xylophone

As I only earn £10000 per annum am I restricted to putting £3600 into a pension for tax relief? Can this be a SIPP or should the company organise one through the auto enrolment scheme?

No - you may invest up to the total of your earnings ( before deduction of personal allowance) into a pension scheme but would do this net of basic rate tax.

You could therefore pay £8000 to the pension provider and the provider would claim £2000 for your pot from HMRC. You could use a SIPP or a personal pension. Example http://www.cavendishonline.co.uk/pensions/personal-pensions/

http://www.thisismoney.co.uk/money/diyinvesting/article-2564059/How-Sipp-platform-costing-you.html

http://www.contractoruk.com/money/what_are_my_pensions_options.html This might be worth a look.

xylophone

https://www.gov.uk/workplace-pensions

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/301563/Pensions_fact_sheet_v8.pdf

https://www.gov.uk/new-state-pension/overview

for information.

mandy15_2

thank you for these links they are very helpful