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  • FIRST POST
    • happyandcontented
    • By happyandcontented 14th Sep 18, 5:36 PM
    • 1,393Posts
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    happyandcontented
    How much can you Salary sacrifice?
    • #1
    • 14th Sep 18, 5:36 PM
    How much can you Salary sacrifice? 14th Sep 18 at 5:36 PM
    I work as a Director part time in a Ltd Co. How much of my salary can I sacrifice into a pension?
Page 1
    • MallyGirl
    • By MallyGirl 14th Sep 18, 6:58 PM
    • 2,951 Posts
    • 7,947 Thanks
    MallyGirl
    • #2
    • 14th Sep 18, 6:58 PM
    • #2
    • 14th Sep 18, 6:58 PM
    You cannot sal sac yourself below national minimum wage so you need to leave yourself about 1200 pcm
    • happyandcontented
    • By happyandcontented 14th Sep 18, 7:02 PM
    • 1,393 Posts
    • 2,641 Thanks
    happyandcontented
    • #3
    • 14th Sep 18, 7:02 PM
    • #3
    • 14th Sep 18, 7:02 PM
    You cannot sal sac yourself below national minimum wage so you need to leave yourself about 1200 pcm
    Originally posted by MallyGirl
    The Directorship is a second job. I earn more than NMW in my other job. Does that still apply?
    • Dox
    • By Dox 14th Sep 18, 7:09 PM
    • 936 Posts
    • 718 Thanks
    Dox
    • #4
    • 14th Sep 18, 7:09 PM
    • #4
    • 14th Sep 18, 7:09 PM
    I work as a Director part time in a Ltd Co. How much of my salary can I sacrifice into a pension?
    Originally posted by happyandcontented
    Depends if the NMW applies, which isn't always the case with directors and other office holders. See https://www.gov.uk/hmrc-internal-manuals/national-minimum-wage-manual/nmwm05140

    If there are no NMW considerations, you can sacrifice 100% of pay (maximum tax relievable contribution in any tax year is normally 40,000).
    • Dox
    • By Dox 14th Sep 18, 7:11 PM
    • 936 Posts
    • 718 Thanks
    Dox
    • #5
    • 14th Sep 18, 7:11 PM
    • #5
    • 14th Sep 18, 7:11 PM
    The Directorship is a second job. I earn more than NMW in my other job. Does that still apply?
    Originally posted by happyandcontented
    Irrelevant - you need to look at your directorship (see previous post) on a standalone basis.
    • kidmugsy
    • By kidmugsy 14th Sep 18, 8:32 PM
    • 11,576 Posts
    • 8,101 Thanks
    kidmugsy
    • #6
    • 14th Sep 18, 8:32 PM
    • #6
    • 14th Sep 18, 8:32 PM
    I'm thinking of setting up a company. The directors would draw no salary but would benefit from pension contributions. Anything wrong with this?
    Free the dunston one next time too.
    • DT2001
    • By DT2001 14th Sep 18, 8:46 PM
    • 48 Posts
    • 18 Thanks
    DT2001
    • #7
    • 14th Sep 18, 8:46 PM
    • #7
    • 14th Sep 18, 8:46 PM
    There is a link below to HMRC overview pages. I think you cannot take your salary below the minimum wage.
    I was involved in a company 3/4 years ago where a directors bonus was ‘sacrificed’ and they utilised carry back to put over 40k in so assume it is down to the normal pension contributions criteria. Hopefully somewhere in the links on the HMRC pages it will confirm this.


    https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim42775
    • happyandcontented
    • By happyandcontented 14th Sep 18, 8:50 PM
    • 1,393 Posts
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    happyandcontented
    • #8
    • 14th Sep 18, 8:50 PM
    • #8
    • 14th Sep 18, 8:50 PM
    I think that the previous link would be nearer the mark. I am not an employee per se, but a Director with voting rights.
    • Marcon
    • By Marcon 15th Sep 18, 12:17 AM
    • 492 Posts
    • 351 Thanks
    Marcon
    • #9
    • 15th Sep 18, 12:17 AM
    • #9
    • 15th Sep 18, 12:17 AM
    I think that the previous link would be nearer the mark. I am not an employee per se, but a Director with voting rights.
    Originally posted by happyandcontented
    So you receive a director's fee as an office holder(?).
    • happyandcontented
    • By happyandcontented 15th Sep 18, 12:21 PM
    • 1,393 Posts
    • 2,641 Thanks
    happyandcontented
    So you receive a director's fee as an office holder(?).
    Originally posted by Marcon
    Yes, that is correct.
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