Self-employed / Limited Company Pension

mountaindreams

Hi all,


I'm 45 years and self employed. I have around 60k in pensions from 2 previous employers. I haven't paid anything in to any pension for about 15 years and want to get back on track.


Currently I am self employed as a sole trader however I have previously worked through a limited company. I closed the limited company down when I stopped working to have kids and when I restarted work (about 2 years ago) I went down the sole trader route as I wasn't sure how much work I would have coming in so didn't seem worth going limited company again.


I am now picking up more work again and want to start paying into a pension again (starting off at a couple hundred pounds a month but hoping to increase to around 500).


I'm trying to decide whether it is worth working through a limited company again so I can make pension contributions via the company. And does it make a difference in what pensions are available to pay into?


I will look at getting some advice from a IFA but am trying to orientate myself before I approach one.


Any thoughts?

LHW99

When self-employed you can open a SIPP or personal pension, pay in up to your net salary (but less than £40k) and clain tax relief.
If you run a limited company, the company can pay in to a similar scheme. You don't claim tax relief, but the Co gets relief from some corporation tax.
It would probably depend on how much profit your company would make which works out better.

xylophone

https://www.pensionbee.com/pensions-explained/pension-contributions/private-pensions-for-self-employed

drumtochty

If you are going limited do it in April 2019 as by April 2020 it may be difficult getting out of IR35 status in the private sector, that tends to make things less attractive. You may only have a full year to get the full advantage of being limited. At this time of the year it is maybe not worth operating as limited due to the reduced NI allowance. Therefore open 6 April 2019.



Not saying which is best for you, that takes a bit of research.

mountaindreams

Thanks for the replies.


I am confident that I am outside IR35 as I work very much on a freelance basis rather than as a contractor (which I was before). It does mean that the amount of work I have coming in is less predictable than when I was a contractor.


I'm thinking at the moment I am probably better sticking to Sole Trader. The only reason I would go limited company again was if there was a big advantage from a pensions point of view.

atush

Have you done the math? Are you close to paying HRT?

Will you save more tax on your income, or by not paying corporation tax?