Hi. Apologies for long post.
So this was pretty well covered here though governments will meedle so times have changed. Notably taxes on divs.
Having made a company contribution to my sipp what I'm trying to work out is whether to make a personal contribution to same up to the amount of my net lowish salary.
As i understand it co contribution saves 20% CT.
However the very nice gov will give me back 20% of salary against personal irrespective of the actual tax paid. Seems about equal so far. But yes salary incurs 2 helpings of NI. But these are already incurred as this salary is being taken anyway. So again equal.
Although the salary will depress the profit and hence the CT again it is already incurred.
So as far as i can conclude in terms of tax saving both are equivalent. However where they differ is that one takes money out of my pocket (forcing me into hr to preserve income) whereas the other takes from company funds.
Therefore on balance for me I'd rather have a bit more in my pocket so i wouldn't pay into my pension personally.
Does anyone (dis)agree?
The may be some flaws in my thinking!!
Certainly it's a different conclusion to the thread i posted above where they concluded div>personal trumped company contribution.
NL- FYI I've sacked my accountant so can't ask them!
So this was pretty well covered here though governments will meedle so times have changed. Notably taxes on divs.
Having made a company contribution to my sipp what I'm trying to work out is whether to make a personal contribution to same up to the amount of my net lowish salary.
As i understand it co contribution saves 20% CT.
However the very nice gov will give me back 20% of salary against personal irrespective of the actual tax paid. Seems about equal so far. But yes salary incurs 2 helpings of NI. But these are already incurred as this salary is being taken anyway. So again equal.
Although the salary will depress the profit and hence the CT again it is already incurred.
So as far as i can conclude in terms of tax saving both are equivalent. However where they differ is that one takes money out of my pocket (forcing me into hr to preserve income) whereas the other takes from company funds.
Therefore on balance for me I'd rather have a bit more in my pocket so i wouldn't pay into my pension personally.
Does anyone (dis)agree?
The may be some flaws in my thinking!!
Certainly it's a different conclusion to the thread i posted above where they concluded div>personal trumped company contribution.
NL- FYI I've sacked my accountant so can't ask them!
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