Tax relief on Employer Pension Contributions

milleniumaire

Hi, I am the Director of my own Limited Company, which provides IT Services.  My wife is the Company Secretary.
My Company (my employer) has been contributing to a Royal London Company Pension Scheme for a number of years now.  The payments are made by the company, from the company bank account on a monthly basis.  The total pension payments during the tax year are treated as an expense and therefore reduce the company Corporation Tax bill.  So, the company saves tax by making these contributions to a pension that is in my name.  There is no personal tax relief on the payments made into the company pension scheme.
So far so easy!
I am now looking to open a SIPP for my wife with Hargreaves Lansdown (HL).  The company will pay one-off amounts each year, probably around £10K, but this may be split into multiple smaller payments throughout the year.  These payments will NOT go through the payroll so are not related to her salary in any way; they are employer contributions to her SIPP. 
As such, it is my understanding that like my company pension contributions, they will be treated as an expense to the company and so will reduce the corporation tax bill even further.
When I went through the process of opening the SIPP through the HL website with an initial payment of £1,000, I was told that an additional £250 would be applied to the SIPP as a tax relief.  This has completely confused me and I'm sure this can't be correct as this would imply that TWO lots of tax relief are being given; the company corporation tax relief and the personal tax relief for my wife. 
How can this be correct?  What am I missing?

Marcon

You're completely right about the tax. Somewhere along the line HL think this is a personal contribution - that's what you need to sort out with them, so they realise it is a company contribution on behalf of an employee of your company. Could you have inadvertently ticked a box which popped the contribution into the wrong category?

milleniumaire

Hi Marcon, thanks for your prompt response.
I did wonder if I had missed something during the opening process, so I cancelled the application and started it again and I definitely haven't missed anything.  It would appear that for the opening contribution it doesn't allow it to be declared as a company contribution.  I confess, I didn't actually enter the debit card details for my company, so unless this is clever enough to then identify it is a company debit card and do something different, however I suspect this isn't the case as the tax relief amount is shown prior to requesting the debit card details so as you say, there is an assumption it will always be a personal contribution, which is rather short sighted of them!
I have sent them a secure message asking them what is going on and how I can open the SIPP with a company contribution that won't be subject to tax relief.  Unfortunately their secure messages are taking many days, even weeks, to get responses in these difficult times.

Marcon

You are using the right application form...? Could that be the issue: https://www.hl.co.uk/pensions/contributions/employer/forms

Alternatively, looking at the employee form, I noticed this at the top, which might explain your frustration:

Start an HL Self-Invested Personal Pension with an employer contribution

The employee should complete part A and the employer part B. Then return in one of our pre-paid envelopes or to our simple Freepost address:Freepost, HARGREAVES LANSDOWN.

If making a lump sum contribution, please enclose a cheque from the employer payable to HL SIPP/initials and surname of the member.
Alternatively we can accept a bank transfer, but the employee must open their HL SIPP beforehand – see page 4.

xylophone

https://www.hl.co.uk/pensions/contributions/employer/forms
Should a form have been completed?

milleniumaire

Thanks for your feedback.
I did find the "paper" form that has to be completed for opening a SIPP where the employer is making contributions.
Having spoken to HL this morning if the opening amount is an employer contribution it CANNOT be opened online, so I have done it over the phone.  It takes much longer and I had to provide them with details of the business, even though the company already has its own stocks and shares account and it is linked to my existing HL account!  Lots of questions, lots of time and I now have to wait for their business team to contact me next week (and ask even more questions) to take the initial employer contribution.
They did confirm that once the account is setup, when topping up the SIPP from a company debit card, there is a checkbox that is used to distinguish between personal and employer contributions.