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DIY Pensions for a Limited Company?

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    This is relevant to my interests. I'm starting contracting from next month, and would obviously like to start paying into a sipp via my Ltd company to save on corporation tax (or should I just pay the corporation tax and invest into personal ISAs?!). As the vanguard sipp won't be available when I start, what's a good practice in terms of paying into it? I know 15% of your gross is a good start, but would you do that monthly, or a lump sum at some point in the financial year?
    Last edited by relax24; 20 August 2018, 16:24.

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      Originally posted by relax24 View Post
      This is relevant to my interests. I'm starting contracting from next month, and would obviously like to start paying into a sipp via my Ltd company to save on corporation tax (or should I just pay the corporation tax and invest into personal ISAs?!). As the vanguard sipp won't be available when I start, what's a good practice in terms of paying into it? I know 15% of your gross is a good start, but would you do that monthly, or a lump sum at some point in the financial year?
      Concentrate on getting your warchest up and think about your pension later. You can put a lump some in later in the year if it's gone well. Getting the second gig is the hardest so make sure you are sorted for that first. You want 3 to 6 months spare money, not tax money in the bank before you start living the life or paying in to pension.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

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        Originally posted by northernladuk View Post
        Concentrate on getting your warchest up and think about your pension later. You can put a lump some in later in the year if it's gone well. Getting the second gig is the hardest so make sure you are sorted for that first. You want 3 to 6 months spare money, not tax money in the bank before you start living the life or paying in to pension.
        Thanks! I've been given a 12 month contract (i'm aware that doesn't mean anything) but yea, I think I'll go down the route of making a/a few lump payments during the year. I was actually speaking to my accountant and I suggested not paying myself a salary/dividends for the first couple months. May just dip into my savings to cover myself in the mean time.

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          Quick question:

          I've got a deadline before which I can pay cash into a pension to mitigate a large corporation tax bill.

          I'm thinking of a Hargreaves Landsdown SIPP and transferring the money from the company account directly in to there.

          My question is this: Can I setup a SIPP personally and then transfer the money in from the company OR do I have to run the SIPP as if my company is the controlling owner, i.e. set it up from within the company?

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            Originally posted by ChevyChase View Post
            Quick question:

            I've got a deadline before which I can pay cash into a pension to mitigate a large corporation tax bill.

            I'm thinking of a Hargreaves Landsdown SIPP and transferring the money from the company account directly in to there.

            My question is this: Can I setup a SIPP personally and then transfer the money in from the company OR do I have to run the SIPP as if my company is the controlling owner, i.e. set it up from within the company?
            Isn't the clue in the acronym SIPP???
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              Originally posted by ChevyChase View Post
              Quick question:

              I've got a deadline before which I can pay cash into a pension to mitigate a large corporation tax bill.

              I'm thinking of a Hargreaves Landsdown SIPP and transferring the money from the company account directly in to there.

              My question is this: Can I setup a SIPP personally and then transfer the money in from the company OR do I have to run the SIPP as if my company is the controlling owner, i.e. set it up from within the company?
              You're SIPP is your own. Your company then makes employer contributions into your SIPP.

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                Seena few posts about transfers on this thread. I have a number of frozen pensions from previous employers. Is it best practice to transfer into one pension? I have an AJBell SIPP that is my main pension. There can be exit fees from pensions even if you transfer?

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                  Originally posted by hgllgh View Post
                  Seena few posts about transfers on this thread. I have a number of frozen pensions from previous employers. Is it best practice to transfer into one pension? I have an AJBell SIPP that is my main pension. There can be exit fees from pensions even if you transfer?
                  I'd say it depends on how they are performing. That said I don't know if frozen pensions are still invested or held in cash so apologies if I'm completely wrong... But if they aren't performing very well then it would be common sense to transfer.

                  Mine was OK but I didn't personally like them all hanging around so I transferred them so I could control them better and help them grow. Depends on how much effort you put in to investing them as well.

                  I doubt there will be exit fees but you need to ring and check. Transferring is a doddle. The receiving provider deals with it all for you and only takes 2 weeks or so (from my last experience).

                  It was a no brainer for me so I'd say do a bit of research and see what the numbers say. We can't really say yea or nea because we don't know the details but definitely put some work in to check yourself. I am pretty sure the answer will be pretty clear.
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

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                    I have a SIPP which to date I have contributed ad-hoc payments direct from my Ltd. But now I have some more largeish payments to make, I am thinking of taking them as dividends and paying them into SIPP personally. This should generate tax refund/uplift such that I've invested same amount as if just done gross via Ltd?

                    Reason for asking about this approach is that for mortgages etc, they look at company profits. Making company pension contributions depresses the company profits, hence making the amount available to loan lower.

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                      Originally posted by kryten22uk View Post
                      I have a SIPP which to date I have contributed ad-hoc payments direct from my Ltd. But now I have some more largeish payments to make, I am thinking of taking them as dividends and paying them into SIPP personally. This should generate tax refund/uplift such that I've invested same amount as if just done gross via Ltd?

                      Reason for asking about this approach is that for mortgages etc, they look at company profits. Making company pension contributions depresses the company profits, hence making the amount available to loan lower.
                      It shouldn't make any difference to your mortgage offer. A cursory view of your accounts will determine profitability before 'staff costs'.
                      Anyway..... Not a good idea to mortgage yourself to the hilt.
                      Not right now anyway when the economy could well hit the buffers next March coupled with a house price crash.
                      See You Next Tuesday

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