Going to the Darkside - what to do with Company any ideas

[Paralytic]

So you'd need to earn it in the current year.

Not if its paid by your employer - the "payment must be less or equal to salary" is only for personal payments into your pension.

[rootsnall]

Not if its paid by your employer - the "payment must be less or equal to salary" is only for personal payments into your pension.

It was a struggle to get my accountant to pay a large lump sum earned in the current Ltd tax year once I wasn't earning any more. I would say no chance they'd go back into previous years, it would need the taxman to actually pay you a refund from previous years to make it worthwhile !? Or am I missing something. Quite possible.

[eek]

It was a struggle to get my accountant to pay a large lump sum earned in the current Ltd tax year once I wasn't earning any more. I would say no chance they'd go back into previous years, it would need the taxman to actually pay you a refund from previous years to make it worthwhile !? Or am I missing something. Quite possible.

Yes - company pays a large amount into your pension pot - so company runs at a loss this year.

You can then reclaim previously paid profits back from HMRC to cover that loss see Work out and claim relief from Corporation Tax trading losses - GOV.UK

[NowPermOutsideUK]

Maybe it’s just me but I’m confused

Someone earning 10k as director can decide to stuff their pension with three years back pension of 40k a year? Is that what you are saying?

But the pension payment needs to be paid by the employer rather than the employee? What net effect does that distinction habe exactly and does it make a difference ?

I follow the corp tax refund of a loss made. No arguments there

[GhostofTarbera]

Maybe it’s just me but I’m confused

Someone earning 10k as director can decide to stuff their pension with three years back pension of 40k a year? Is that what you are saying?

But the pension payment needs to be paid by the employer rather than the employee? What net effect does that distinction habe exactly and does it make a difference ?

I follow the corp tax refund of a loss made. No arguments there

Pension ?

Chap I know just snuffed it - 4 days into retirement covid19

Live for today people


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[NowPermOutsideUK]

True but some people cannot sleep today knowing the fridge will be empty tomorrow so planning sometimes does help ..

I think more people will be looking at pension top ups to optimise tax from perm / FTC / inside salaries

[Old Greg]

Pension ?

Chap I know just snuffed it - 4 days into retirement covid19

Live for today people


Sent from my iPhone using Contractor UK Forum

Not a friend though?

[GregRickshaw]

You are ok still at 55 ( see eek's latest post ). You really should be paying as much as you can afford into a SIPP. I am working through an umbrella and paying myself the minimum wage on hours worked and the rest ( the vast majority of it ) goes into a SIPP. My tax and NI bill comes to sums like 57p :-) It is taxable when it comes out of the SIPP but you'll have £12K tax free and you've avoided a double dose of NI.

My Ltd got fully struck off today

When you say 'paying yourself minimum wage' through an Umbrella, how did you manage this? I'm not sure what you mean but I would like to know how to best get my money out of my LTD, this sounds interesting?

[ladymuck]

When you say 'paying yourself minimum wage' through an Umbrella, how did you manage this? I'm not sure what you mean but I would like to know how to best get my money out of my LTD, this sounds interesting?

IIRC some umbrellas will allow you to put most of your day rate into a pension as long as they adhere to minimum wage regulations. So they'll calculate something along the lines of 40 hours @ £8.72 to pay to you and the rest goes into your pension (that's my understanding, it's most likely more nuanced than that in practice). It may be possible to do the same from your Ltd Co but you ought to check with your accountant and IFA to make sure you remain within all the various rules.

[rootsnall]

IIRC some umbrellas will allow you to put most of your day rate into a pension as long as they adhere to minimum wage regulations. So they'll calculate something along the lines of 40 hours @ £8.72 to pay to you and the rest goes into your pension (that's my understanding, it's most likely more nuanced than that in practice). It may be possible to do the same from your Ltd Co but you ought to check with your accountant and IFA to make sure you remain within all the various rules.

Correct, that's what I'm doing. The umbrella I was using and been totally mistake free is handing me over to a better known outfit this week. Haven't bothered asking why but a buy out I assume. Lets see how they do. They already say they can't do the hours @ min wage setup, which I could do on a fag packet in 10 secs, but it's on very large percentage going into the pension which is roughly the same thing.

I have also done the same with a Ltd in the past. Talk to your accountant. Should be routine.