Salary sacrifice with own Ltd company. Possible?

jellybean400

Hi

At my former place of work I was enrolled in a salary sacrifice scheme for pension contributions, which seemed like a really good arrangement.

I'm now self employed and my partner has a Ltd company. My question is, is it possible to set up a salary sacrifice arrangement, either through his company or through my own if I were to set one up? Would the benefits be worth it if so?

Can't find much about this online although from what I understand it ought to be possible - so perhaps I'm missing something.

Thanks

jellybean400

(I've seen for example it's possible for cyclescheme, but not seen so much on pensions)

Linton

jellybean400 wrote: »

Hi

At my former place of work I was enrolled in a salary sacrifice scheme for pension contributions, which seemed like a really good arrangement.

I'm now self employed and my partner has a Ltd company. My question is, is it possible to set up a salary sacrifice arrangement, either through his company or through my own if I were to set one up? Would the benefits be worth it if so?

Can't find much about this online although from what I understand it ought to be possible - so perhaps I'm missing something.

Thanks

Salary sacrifice isnt something you need to "set up". It simply means the company makes higher employer pension contributions and pays you lower wages, which is presumably what you would do anyway.

jellybean400

I wouldn't know because I haven't done this before. But thanks, I guess what you're basically saying is as one's own employer this is entirely under your control anyway.

DavidT67

If you are a controlling director of a limited company you can choose to make direct gross pension contributions to your pension as part of your remuneration package.

No need for salary sacrifice; indeed typically you would pay yourself a minimal salary at or below the personal tax allowance.

SonOf

Salary sacrifice with own Ltd company. Possible?

Possible but pointless.

I'm now self employed and my partner has a Ltd company. My question is, is it possible to set up a salary sacrifice arrangement, either through his company or through my own if I were to set one up? Would the benefits be worth it if so?

You are self employed. So, you cannot make employer contributions. He is a director of a limited company so hhe can.

A director does not sacrifice salary. in the vast majority of cases, they take a salary to the primary threshold. This qualifies them for the benefit of paying NI without actually paying any NI. Any amount above the primary threshold is taken as dividends. Which do not pay NI on them.

He just makes employer contributions to his pension. no sacrifice via payroll is necessary or needed.

Terron

SonOf wrote: »

Possible but pointless.
[snip]
He just makes employer contributions to his pension. no sacrifice via payroll is necessary or needed.

Note that you don't pay ony tax on the contributions and the company can even claim them against corporation tax.

DT2001

Do you have an accountant, if so ask about costs of setting up/running a limited company. Then ask about the potential gains - paying less N.I. (But some dividend tax), timing of income if profits vary considerably year to year.
Without more information it is not possible to answer accurately.
Maybe an accountant, on here, could give you a rough idea of the level of income that justifies incorporating rather than staying self employed

drumtochty

Everyone is missing the IR35 regulations. If the original poster is caught under IR 35 then they get paid after the agency or client pay employers NI and then deduct employees NI. Therefore not the best situation to be in.


Has the original poster researched their IR35 status after 6 April 2020