Self employed part time maximum payment into SIPP

AlanP_2

bazray said:

Dazed_and_C0nfused said:

bazray said:

Secret2ndAccount said:

With a variable level of profits be careful to match the contributions with the correct year. You have to pay into the pension by Apr 5th, but you have until the following January to file the tax form. So you might not have calculated your profits yet, but the deadline for pension contributions doesn't wait. You are left having to guestimate what the maximum contributions should be. If you find you have paid in too much you can always ask for it back later.

Thanks, yes the plan would probably be to put in a conservative estimate then top it up when that years returns have been filed. In hindsight having a Sipp already open and putting in a small amount each year would have been better as you can backdate up to 3 years it seems. Not to worry, live and learn 

I think you've misunderstood the rules somewhere along the line.

You can never backdate pension contributions, you only ever make contributions for the current tax year.

You can sometimes make use of unused annual allowance from the previous 3 tax years (to make additional contributions in the current tax year) but that is only relevant once you have used the current tax years annual allowance, currently £60k, so this won't be of any use to your partner.

She needs to get a handle on what her taxable profit will be by March and make contributions on that basis.

If her accounting year ends earlier in the year that will make life easier but if she had a 31 March or 5 April (accounts) year end then there will be some guesswork and she may need to err on the cautious side.

Yes, you can only go back 3 years and top up any unused allowance that's what I meant, but you must have the pension open in the first place that's why I said in hindsight as she doesn't have a pension at the moment unfortunately. Yes will will be cautious, thanks for the advice 

Yes, but ONLY if relevant income this tax year is above £60k in simple terms.

There are 2 separate limits - income and Annual Allowance. You have to stick within both of them.

bazray

AlanP_2 said:

bazray said:

Dazed_and_C0nfused said:

bazray said:

Secret2ndAccount said:

With a variable level of profits be careful to match the contributions with the correct year. You have to pay into the pension by Apr 5th, but you have until the following January to file the tax form. So you might not have calculated your profits yet, but the deadline for pension contributions doesn't wait. You are left having to guestimate what the maximum contributions should be. If you find you have paid in too much you can always ask for it back later.

Thanks, yes the plan would probably be to put in a conservative estimate then top it up when that years returns have been filed. In hindsight having a Sipp already open and putting in a small amount each year would have been better as you can backdate up to 3 years it seems. Not to worry, live and learn 

I think you've misunderstood the rules somewhere along the line.

You can never backdate pension contributions, you only ever make contributions for the current tax year.

You can sometimes make use of unused annual allowance from the previous 3 tax years (to make additional contributions in the current tax year) but that is only relevant once you have used the current tax years annual allowance, currently £60k, so this won't be of any use to your partner.

She needs to get a handle on what her taxable profit will be by March and make contributions on that basis.

If her accounting year ends earlier in the year that will make life easier but if she had a 31 March or 5 April (accounts) year end then there will be some guesswork and she may need to err on the cautious side.

Yes, you can only go back 3 years and top up any unused allowance that's what I meant, but you must have the pension open in the first place that's why I said in hindsight as she doesn't have a pension at the moment unfortunately. Yes will will be cautious, thanks for the advice 

Yes, but ONLY if relevant income this tax year is above £60k in simple terms.

There are 2 separate limits - income and Annual Allowance. You have to stick within both of them.

Oh I see, so the carry forward only applies if you max out the current year at £60k, thanks for the clarification