Any Self-Employed using Moneybox for your Lifetime ISA?

redefinr

Being self-employed for a bunch of years now, pension has always been a stressful thought.

I jumped into Moneybox pretty much one year ago, I was quite appealed by 25% bonus they offered on their Lifetime ISA. I set up a quick and very minimal saving pot (like £50/month), something to just get started and not even thinking about it. 
As the months went by, I kept receiving messages from the app how I could save £4k in taxes on my savings but I never had a chance to wrap my head around it. 
Is my deposit considered as part of my 'business expenses' and therefore can I claim it to my expenses at the end of the year?

Would love to read and understand the ins and out....

Thank you!

Dazed_and_C0nfused

All lifetime ISA's have a 25% bonus, it isn't something better from Moneybox.

https://www.gov.uk/lifetime-isa

It isn't a business expense. 

Emmia

If you want a pension, why aren't you (also) investing in that, and getting the tax relief? 

However young you are, £50 a month in a LISA (even with the bonus) isn't going to provide much of a retirement...

redefinr

Emmia said:

If you want a pension, why aren't you (also) investing in that, and getting the tax relief? 

However young you are, £50 a month in a LISA (even with the bonus) isn't going to provide much of a retirement...

I'm 100% with you on that. Why investing would be tax relief and just deposit into the pension wouldn't?

Sorry I'm actually really bad with taxes and stuff, I let my accountant handle all of that although he's not great at giving me advices.

Emmia

redefinr said:

Emmia said:

If you want a pension, why aren't you (also) investing in that, and getting the tax relief? 

However young you are, £50 a month in a LISA (even with the bonus) isn't going to provide much of a retirement...

I'm 100% with you on that. Why investing would be tax relief and just deposit into the pension wouldn't?

Sorry I'm actually really bad with taxes and stuff, I let my accountant handle all of that although he's not great at giving me advices.

If you're self employed, you're (hopefully) paying yourself a salary of some sort? Pension contributions come out of your pay before you pay income tax - talk to your accountant about the best way of doing it. 

Jeremy535897

Emmia said:

redefinr said:

Emmia said:

If you want a pension, why aren't you (also) investing in that, and getting the tax relief? 

However young you are, £50 a month in a LISA (even with the bonus) isn't going to provide much of a retirement...

I'm 100% with you on that. Why investing would be tax relief and just deposit into the pension wouldn't?

Sorry I'm actually really bad with taxes and stuff, I let my accountant handle all of that although he's not great at giving me advices.

If you're self employed, you're (hopefully) paying yourself a salary of some sort? Pension contributions come out of your pay before you pay income tax - talk to your accountant about the best way of doing it. 

If you're self employed, whatever "salary" you choose to pay yourself is irrelevant for tax purposes. What matters is the taxable profit, not how you choose to spend it.

Emmia

Jeremy535897 said:

Emmia said:

redefinr said:

Emmia said:

If you want a pension, why aren't you (also) investing in that, and getting the tax relief? 

However young you are, £50 a month in a LISA (even with the bonus) isn't going to provide much of a retirement...

I'm 100% with you on that. Why investing would be tax relief and just deposit into the pension wouldn't?

Sorry I'm actually really bad with taxes and stuff, I let my accountant handle all of that although he's not great at giving me advices.

If you're self employed, you're (hopefully) paying yourself a salary of some sort? Pension contributions come out of your pay before you pay income tax - talk to your accountant about the best way of doing it. 

If you're self employed, whatever "salary" you choose to pay yourself is irrelevant for tax purposes. What matters is the taxable profit, not how you choose to spend it.

Er, ok... 

As you're clearly so knowledgeable, perhaps you could provide advice to the OP,  as to how they can do pension arrangements effectively rather than attacking me?

Jeremy535897

Correcting a common misconception is not "attacking" anyone. It is important to understand that a self employed person is taxed on the profit their business makes, which in simple terms is turnover, less purchases, less expenses. What the self employed person chooses to draw out of the business doesn't matter. Self employed people can pay into a personal pension, and there is some straightforward guidance here:
https://www.pensionbee.com/pensions-explained/pension-types/self-employed-pensions

Albermarle

Sorry I'm actually really bad with taxes and stuff, I let my accountant handle all of that although he's not great at giving me advices.

From comments on other threads/boards , it seems accountants are often not up to speed with all the details about pensions, ISA's etc . Ideally you need advice from a financial advisor but unfortunately they will not be interested at this level of money .

LISA and pensions are two different ways to save for retirement .

With a LISA the government will add 25% to your contributions , but you can only add maximum £4K per tax year. You can take income from it from 60 years old tax free.

With a pension the government will  refund tax you have paid on your contributions . Effectively this also means adding 25% to your contributions. You can take income from a pension from your late Fifties. However you may have to pay some tax on a pension income, but the limit on how much you can add is higher than from a LISA for most people earning an income.

In summary - LISA is usually best if the amounts you can contribute are less than £4Kpa.

AS another poster said if you only save £50 p month, then it will only give you a pretty measly pension income . You should really think about increasing it ( a lot) 

redefinr

Thanks for all the inputs.

I'm self employed and I operate as a 'sole trader' - therefore I don't really give myself a salary but instead everything I earn is my income. Obviously, I pay into the national pension (NIN....) but I'm aware that's going to be peanuts in the future, hence I need something extra. 
I got to a point where I don't really have many expenses in my business and I kinda was wondering if there is something in there (Lifetime ISA) where it could be counted as 'business expenses' but it seems that's not the case (although I swear down Moneybox sent me many emails about 'tax relief' or 'save on taxes' type thing...mmmm).
But yeah, totally agree that what I'm putting right now into my Lisa is almost a joke and I will be increase it in the next few weeks (hopefully).

Albermarle

 Obviously, I pay into the national pension (NIN....) but I'm aware that's going to be peanuts in the future, 

The state pension is not by any means 'peanuts ' . It is something valuable to have . The problem is that on its own it is not enough to have a reasonable retirement income, without some extra from private pension/savings/investments .

The current state pension is about £10K pa , guaranteed for life , rising every year with inflation ( and more sometimes ). It is very unlikely that any government would make any significant negative changes to it as it would be electoral suicide.

To generate that sort of guaranteed inflation linked income from a pension pot, it would have to be at least a quarter of a Million Pounds.