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Question on paying into a SIPP from a limited company

ChequeBookGerry
Posts: 33 Forumite

Hello all,
I am a new IT contractor, with my own limited company (just for me), paying myself a small salary plus dividends, filling in a personal tax return - all in the usual manner. I want to set up a SIPP and I read that I can contribute into a SIPP from the company, so getting the tax relief directly - no Corp Tax on the payments and no dividend tax to pay later. All fine. This may be a very silly question but I am slightly unclear as to the mechanics of doing that. Do I literally just pay for the investment in my personal SIPP using the company bank account or do I have to do something like set up/register a company pension scheme or suchlike, as I can see I can do in my Quickbooks software?
Many thanks.
I am a new IT contractor, with my own limited company (just for me), paying myself a small salary plus dividends, filling in a personal tax return - all in the usual manner. I want to set up a SIPP and I read that I can contribute into a SIPP from the company, so getting the tax relief directly - no Corp Tax on the payments and no dividend tax to pay later. All fine. This may be a very silly question but I am slightly unclear as to the mechanics of doing that. Do I literally just pay for the investment in my personal SIPP using the company bank account or do I have to do something like set up/register a company pension scheme or suchlike, as I can see I can do in my Quickbooks software?
Many thanks.
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Comments
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Do I literally just pay for the investment in my personal SIPP using the company bank account or do I have to do something like set up/register a company pension scheme or suchlike, as I can see I can do in my Quickbooks software?
You just make employer contributions into your individual pension. You record on your records as a business expense. You do not use a workplace pension or occupational scheme (you wouldn't on the latter as you dont have the scale).
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
You can use a SIPP and then contact the provider to set up payments directly from your business. You will likely need to fill in a form and send it back to ensure that the payments are treated correctly so that no additional tax is claimed back by the SIPP platform as like you say you are already getting the tax benefit through corporation tax reduction.
Here is an example with Youinvest
Employer pension contributions | AJ Bell Youinvest
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The important thing is to pay directly from the company's bank account and make sure the SIPP provider knows it is a company contribution. It sounds blindingly obvious, but it's surprising how many people happily pay out of their personal account with the intention of claiming it back as an 'expense'.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!0
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Thanks everyone. I have found the form on the HL website.0
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