Carry Forward Employer contributions to SIPP

jfjuk

I want to carry forward pension contribution limits from the last three years for my Limited Company.  My understanding is the most I can contribute each year as a Company Director is up to the profit of the company for that year (to a maximum of £40k).  Is this the gross pre-tax profit, or net profit after corporation tax?

TVAS

You could have googled this I did to remind myself: Your limited company can contribute pre-taxed company income to your pension. Because an employer contribution counts as an allowable business expense, your company receives tax relief against corporation tax, so the company could save up to 19% in corporation tax.
Your employer pension contributions must abide by the rules for allowable deductions. The rules state that the pension contributions should be ‘wholly and exclusively’ for the purposes of business.  

jfjuk

Thanks.   I've been googling but couldn't find the specific info regarding whether it was pre-tax profit the allowance was based on.  I've also tried to find out what exactly is meant by 'Wholly and exclusively for the purposes of business', but am still in the dark.  What circumstances would the pension contributions not fit this description?  Also, is that corporation tax saving back-dateable?

elouise01582

Corporation tax saving cannot be backdated.  Your Accountant should be able to explain the 'wholly and exclusively' rules and I think it is only personal contributions that can use carry forward - which makes sense as you cannot backdate the corporation tax saving from employer contributions.

jfjuk

elouise01582 said:

Corporation tax saving cannot be backdated.  Your Accountant should be able to explain the 'wholly and exclusively' rules and I think it is only personal contributions that can use carry forward - which makes sense as you cannot backdate the corporation tax saving from employer contributions.

Thanks for the reply.  The last paragraph on page 1 of this document suggests employer contributions can be carried forward:

https://www.zurichintermediary.co.uk/-/media/project/zwp/uk-intermediary/docs/have-you-talked-about/carry-forward-technical.pdf

Dazed_and_C0nfused

jfjuk said:

elouise01582 said:

Corporation tax saving cannot be backdated.  Your Accountant should be able to explain the 'wholly and exclusively' rules and I think it is only personal contributions that can use carry forward - which makes sense as you cannot backdate the corporation tax saving from employer contributions.

Thanks for the reply.  The last paragraph on page 1 of this document suggests employer contributions can be carried forward:

https://www.zurichintermediary.co.uk/-/media/project/zwp/uk-intermediary/docs/have-you-talked-about/carry-forward-technical.pdf

You have completely misinterpreted that.

It says Employer contributions can also be used for carry forward and are therefore subject to the Annual Allowance.

All that carry forward does is allow more to be paid in the current tax year.  There are no circumstance where you can contribute in the current tax year and it be treated as paid in the previous tax year(s).

jfjuk

Dazed_and_C0nfused said:

jfjuk said:

elouise01582 said:

Corporation tax saving cannot be backdated.  Your Accountant should be able to explain the 'wholly and exclusively' rules and I think it is only personal contributions that can use carry forward - which makes sense as you cannot backdate the corporation tax saving from employer contributions.

Thanks for the reply.  The last paragraph on page 1 of this document suggests employer contributions can be carried forward:

https://www.zurichintermediary.co.uk/-/media/project/zwp/uk-intermediary/docs/have-you-talked-about/carry-forward-technical.pdf

You have completely misinterpreted that.

It says Employer contributions can also be used for carry forward and are therefore subject to the Annual Allowance.

All that carry forward does is allow more to be paid in the current tax year.  There are no circumstance where you can contribute in the current tax year and it be treated as paid in the previous tax year(s).

I do understand that, I was responding to elouise01582 saying that they believed that "only personal contributions" could be carried forward.