Is tax relief given on contributions from Directors Salary under Primary Threshold?

scdandem

Hi, I'd very much appreciate some help with my query.

I draw the maximum directors salary under the primary threshold (so tax free) from my small limited company, plus tax free dividends, and pay surplus profits into my pension to offset corporation tax.

I have accrued some savings over the years and wanted to boost my pension by taking advantage of unused personal allowances for this and the past 3 years through the pension carry forward rule.

I've recently paid personal contributions into my pension that add up to the past three years unused allowances, and I intended to carry on paying in this year's salary (I'm aware that HMRC work it from the current year backwards but it should all balance out by the end of the tax year).

I can see that the contributions paid in so far have had the tax relief added by the pension company.

But... I've suddenly thought - can/should I actually get tax relief on personal contributions if my salary is actually below the primary threshold? Or have I just given myself a tax bill by paying this money in?!

I've looked long and hard online and various sites talk about paying personal contributions as well as company contributions, but I can't find anything that specifically talks about whether there is tax relief on personal contributions if they are below the primary threshold.

Thanks for reading and hope you can help.

Dazed_and_C0nfused

If your pensionable earnings are say £8k how can you use unused annual allowance from earlier years 🤔

Jeremy535897

The primary threshold is a red herring. Your tax efficient personal contributions are limited to
1. £3,600 a year gross if you have no relevant earnings or relevant earnings up to £3,600. If relevant earnings are higher, then the limit is the lower of:
2. Your annual allowance (as reduced by employer contributions, plus brought forward unused annual allowance)
3. Your relevant earnings (your salary)

What have you personally been paying? In your case, it looks like your personal contributions will be limited to your salary.