Salary Sacrifice to Sipp

Dybags

Hope someone can point me in the right direction on this.... our company accountants have taken a week to come back and tell me they would need to put me in touch with an IFA.
I am a company director currently being paid less than the standard personal allowance as PAYE with the remainder of my salary as dividends up to the basic rate tax maximum.
If the company were to pay additional amounts directly into a SIPP what if any tax would I be liable for on those additional payments? 

Marcon

Dybags said:

Hope someone can point me in the right direction on this.... our company accountants have taken a week to come back and tell me they would need to put me in touch with an IFA.
I am a company director currently being paid less than the standard personal allowance as PAYE with the remainder of my salary as dividends up to the basic rate tax maximum.
If the company were to pay additional amounts directly into a SIPP what if any tax would I be liable for on those additional payments? 

You don't need an IFA to answer a simple question like yours.

None. And provided the contributions are 'reasonable' in the light of how much they are/how much work you do for the company (ie you're genuinely an employee) the company can claim them as a legitimate business expense, reducing corporation tax. As company contributions, they don't have to be limited to your earnings, but there are overall limits on contributions which your SIPP provider's website will have details of.

dunstonh

I am a company director currently being paid less than the standard personal allowance as PAYE with the remainder of my salary as dividends up to the basic rate tax maximum.

Pretty much the norm then for "own" limited company

If the company were to pay additional amounts directly into a SIPP what if any tax would I be liable for on those additional payments? 

No tax. 
Company directors of "own" limited companies would 99% of the time make employer only contributions.  No SalSac involved as they are exempt from auto-enrolment.    As such, the company profit is what matters.  Not the salary you take.

HMRC don't take any interest in pension contributions with beneficial owners.   Its when there are large employer contributions to employees that they can take an interest and you need to be a little more careful.

Dybags

Thank you both, much appreciated, I'm pretty search engine savvy but couldn't find this information for some reason. 

Grumpy_chap

Dybags said:

Hope someone can point me in the right direction on this.... our company accountants have taken a week to come back and tell me they would need to put me in touch with an IFA.
I am a company director currently being paid less than the standard personal allowance as PAYE with the remainder of my salary as dividends up to the basic rate tax maximum.
If the company were to pay additional amounts directly into a SIPP what if any tax would I be liable for on those additional payments? 

Your arrangement seems straightforward so very surprised that the Accountant said you need an IFA.

As Owner / Director, you can make whatever company pension contribution you wish (subject to funds available) and are not limited by the earnings cap (as employer contributions are always outside of this) but are limited by Annual Allowance plus any available Carry Forward.

That is a straightforward tax question so very surprised the Accountant said you need an IFA.
Did the Accountant think the question was about setting up the SIPP or investment strategy?