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    Default Advice please - backdating pension contributions

    Hi folks. I'm a newbie to this site. I've read through some previous posts but found them difficult to compare to my own situation.

    I've been operating my own limited company for exactly 2 years now. In that time I've taken a salary of c10,600 for the second year and a dividend of c23,000. I only took a dividend of c22,000 in the first year with no salary.

    This year 2016-17 I will be taking a salary of 8,100 and then a dividend.

    The main point - I have a previous company pension scheme that has been operating for the past 7 years. I'm now transferring it to my own limited company to begin making monthly contributions. I want to backdate payments to increase my pension pot, release some money from my company and also reduce my tax bill.

    I have an accountant but they cannot give pension advice. Hence the following questions to the forum:

    1. What is the maximum I can pay in to my pension this year if my salary is 8,100?

    2. Can I backdate pension contributions for the previous two years? If so, how much can I pay into my pension?

    3. If I can backdate payments, will it have any impact on corporation tax this year or over the previous two years? Can I claim back any CT already paid?

    Many MANY thanks for any advice you can give.

    Hawkley

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    1 Company contribution = 40k.

    2 Yes, as you have a scheme that was already established then, another 2 x 40k.

    3 You need to take advice from your accountant, you may have a trading loss this year. They will advise about Corp Tax.

    HTH.

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    Thanks Fred - that's very helpful indeed

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    Sounds like you need a new accountant

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    My post count is Majestic

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    Quote Originally Posted by VillageContractor View Post
    Sounds like you need a new accountant
    This. Surely they can tell you the taxation situation? They cant advise on what pensions to take etc but the limits and rules around taxing it they should.
    'CUK forum personality of 2011' - Winner - Yes really!!!!

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    ASB
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    Quote Originally Posted by Fred Bloggs View Post
    1 Company contribution = 40k.

    2 Yes, as you have a scheme that was already established then, another 2 x 40k.

    3 You need to take advice from your accountant, you may have a trading loss this year. They will advise about Corp Tax.

    HTH.
    From the OP description I am not sure about 2.

    The OP appears to want to make (backdated) employer contributions. They do not appear to have a scheme other than the previous one they are in the process of transferring.

    It seems to be dependant upon that scheme being prepared to accept employer contributions from the current employer (i.e. op's ltd). That may not be the case if they are already transferring or the scheme was set up by their previous employer.

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    Quote Originally Posted by ASB View Post
    From the OP description I am not sure about 2.

    The OP appears to want to make (backdated) employer contributions. They do not appear to have a scheme other than the previous one they are in the process of transferring.

    It seems to be dependant upon that scheme being prepared to accept employer contributions from the current employer (i.e. op's ltd). That may not be the case if they are already transferring or the scheme was set up by their previous employer.
    You may be thinking a little too deeply here. The OP is not backdating the contributions at all. He is carrying forward his allowance for those years. Providing he had a pension scheme in operation those years, he is entitled to do the carry forward.

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    ASB
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    Quote Originally Posted by Fred Bloggs View Post
    You may be thinking a little too deeply here. The OP is not backdating the contributions at all. He is carrying forward his allowance for those years. Providing he had a pension scheme in operation those years, he is entitled to do the carry forward.
    I probably didn't phrase it too well. Yes, I agree that contributions for prior years can be made (and relieved) due to the existence of the scheme from the previous company.

    But I was just musing as the whether that scheme would actually accept them.

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    Quote Originally Posted by ASB View Post
    I probably didn't phrase it too well. Yes, I agree that contributions for prior years can be made (and relieved) due to the existence of the scheme from the previous company.

    But I was just musing as the whether that scheme would actually accept them.
    Don't think it actually matters. He was entitled to contribute, but he didn't. So he gets to carry the entitlement forward.

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    Should post faster


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    I happened to speak to my IFA yesterday and this came up. he explained that you have to use the current year's 40K allowance first. Then, if you wish to contribute more, you use (year-1)'s allowance, then (year-2)'s before you can use (yera-3)'s.

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