Start SIPP?

3stones

jamesd said:

It's OK to guess. When you know the final number tell the pension scheme if it was too high, what it turned out to be, and ask them to pay you a "refund of excess contributions lump sum". It's routine and you have a few years to get it done. The refund doesn't include any tax relief and there are no penalties.

If your guess was too low and the tax year is over it's too late to make more pension contributions for the ended year, so erring a bit high if guessing may be wise.

That is a Handy bit of advice there jamesd, thank you.

Would I be right in thinking that as a sole trader I can also guess in advance gross profit and that I can contribute too a pension 80% of gross profit for each year. Using Albemarle's example above if gross profit this year were to be £35k I could contribute £28 K and the provider would add £7K in tax relief.

jicms

Albermarle said:

Would this mean iWeb's charges for an AJ Bell SIPP would be the same as going directly with AJ Bell?

No- I web have a fixed fee charging system regardless of fund size , whilst AJ Bell have a % charging system.

You can see the different charging structure in this comparison site .

Best trading platforms and stock brokers - Monevator

I understand the different platform charges and chose iWeb for their low fees.
What confuses me is how it works if I invest with AJ Bell, another platform, via iWeb.  Do iWeb fees override AJ Bell's?

Alexland

jicms said:

What confuses me is how it works if I invest with AJ Bell, another platform, via iWeb.  Do iWeb fees override AJ Bell's?

AJ Bell are just doing some of the behind the scenes pension administration you still log in and trade via iWeb and pay the iWeb published prices which in my view for a SIPP are rather high when compared to other fixed or capped price platforms. iWeb is good for large GIA/ISAs but their SIPP offer isn't great.

jicms

Alexland said:

jicms said:

What confuses me is how it works if I invest with AJ Bell, another platform, via iWeb.  Do iWeb fees override AJ Bell's?

AJ Bell are just doing some of the behind the scenes pension administration you still log in and trade via iWeb and pay the iWeb publised prices which in my view for a SIPP are rather high when compared to other fixed or capped price platforms. IWeb is good for large GIA/ISAs but their SIPP offer isn't great.

Brilliant thanks. That's interesting. I hold a Vanguard Life Strategy ISA with iWeb.

jamesd

3stones said:

jamesd said:

It's OK to guess. When you know the final number tell the pension scheme if it was too high, what it turned out to be, and ask them to pay you a "refund of excess contributions lump sum". It's routine and you have a few years to get it done. The refund doesn't include any tax relief and there are no penalties.

If your guess was too low and the tax year is over it's too late to make more pension contributions for the ended year, so erring a bit high if guessing may be wise.

That is a Handy bit of advice there jamesd, thank you.

Would I be right in thinking that as a sole trader I can also guess in advance gross profit and that I can contribute too a pension 80% of gross profit for each year. Using Albemarle's example above if gross profit this year were to be £35k I could contribute £28 K and the provider would add £7K in tax relief.

Looks like it, see PTM045000.

Alexland

jicms said:

Brilliant thanks. That's interesting. I hold a Vanguard Life Strategy ISA with iWeb.

Yes we have our S&S ISAs with iWeb too but their SIPP has an ongoing charge of £90 pa or £180 pa if valued above £50k with extra ongoing charges for starting drawdown. Not their best product and likely to be better priced SIPPs elsewhere for your requirements.

jicms

Can't just presume iWeb are cheap overall!

Dazed_and_C0nfused

3stones said:

jamesd said:

It's OK to guess. When you know the final number tell the pension scheme if it was too high, what it turned out to be, and ask them to pay you a "refund of excess contributions lump sum". It's routine and you have a few years to get it done. The refund doesn't include any tax relief and there are no penalties.

If your guess was too low and the tax year is over it's too late to make more pension contributions for the ended year, so erring a bit high if guessing may be wise.

That is a Handy bit of advice there jamesd, thank you.

Would I be right in thinking that as a sole trader I can also guess in advance gross profit and that I can contribute too a pension 80% of gross profit for each year. Using Albemarle's example above if gross profit this year were to be £35k I could contribute £28 K and the provider would add £7K in tax relief.

No, I think you are limited to taxable profit i.e. the amount that ends up on your Self Assessment calculation.

3stones

Dazed_and_C0nfused said:

No, I think you are limited to taxable profit i.e. the amount that ends up on your Self Assessment calculation.

As a sole trader Is taxable profit not the same as gross profit or do you mean gross profit minus personal allowance? 

Dazed_and_C0nfused

3stones said:

Dazed_and_C0nfused said:

No, I think you are limited to taxable profit i.e. the amount that ends up on your Self Assessment calculation.

As a sole trader Is taxable profit not the same as gross profit or do you mean gross profit minus personal allowance? 

I think gross profit has a different meaning.

Taxable profit is not after deducting the Personal Allowance.

https://www.litrg.org.uk/tax-guides/self-employment/working-out-profits-losses-and-capital-allowances/how-do-i-work-out-my-taxable-profits