Maximum Pension Contributions

Apricota

Hello, please might I check what the maximum pension contribution is? I am employed on £85k making 15% contribution and employer makes 20%. I also have a limited company which I’m making contributions from, with the intent to close this. There what is the maximum contribution I can make. Is it £60k or is it more from limited company as have no tax relief.  Many thanks

Marcon

There is a maximum on which tax relief is allowed, otherwise there is no maximum - if the pension provider will accept 'non-relievable' contributions.

The annual allowance is £60K from all sources, including any tax relief you receive on personal contributions (employer contributions are always paid gross).

You may be able to use carry forward if you have sufficient earnings in the relevant tax year in which contributions are made: https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/carry-forward

Apricota said:

Hello, please might I check what the maximum pension contribution is? I am employed on £85k making 15% contribution and employer makes 20%. I also have a limited company which I’m making contributions from, with the intent to close this. There what is the maximum contribution I can make. Is it £60k or is it more from limited company as have no tax relief.  Many thanks

The employer contribution is paid gross, but even if you aren't paying corporation tax (as your wording suggests), it still counts towards the annual limit.

zagfles

Are you an employee of your limited company, a different company, or both? Is the employment scheme DB or DC? What contributions did you/employer make in previous years? Were you a member of a pension scheme in the previous 3 tax years? 

Apricota

Hello, I am the only employee and director of my own Limited Company. There are no previous years unused, have been contributing upto 60k/40k for the last few years, so no carry forward. Working through I was perhaps optimistic that I could take all out over the next two years and close my limited company down. The money is paid by my limited company directly into my SIPP.

I am also an employee at another company where I work full time on the salary £85k. I have a pension I and they contribute to there. 

Thank you Marcon and Zagfles

zagfles

In which case it's simple, your max contribution to all pensions is £60k (if you want to avoid AA tax charges). That includes all sources, employee, employer, ltd company, and tax relief. I'm assuming the schemes are all DC. 

So as your workplace scheme conts are almost £30k (35% of £85k), you have just over £30k left you could pay in. You could make a personal contribution to a SIPP of £24k and they'd claim £6k tax relief, or you could increase your workplace conts to 50%.

Not sure about paying in from the ltd company, are you still a genuine employee of it, doing work and getting a salary from it, min wage etc? Best ask your accountant about this. But anyway you have enough elsewhere to use up your AA so don't really see any advantage in contributing from the ltd company rather than taking dividends, but best speak to your accountant. 

Apricota

Many thanks Zagfles, will certainly check with accountant.