Help with Pension laws

[Gulliver89]

Hya.

Not an accountant. And even not contracting for too long. But I don't see the actual problem here.

1.in the accounting software you can claim it as an expense that just paid from your personal account (I have a few of these every year). The best practice is that you keep some evidence the expense was for company use (for example asking the vendor for a receipt with your company name on).
2. Although it's a best practice - nothing says you must use business bank account - https://moneysavinganswers.com/busin...-for-business/

[ladymuck]

Hya.

Not an accountant. And even not contracting for too long. But I don't see the actual problem here.

1.in the accounting software you can claim it as an expense that just paid from your personal account (I have a few of these every year). The best practice is that you keep some evidence the expense was for company use (for example asking the vendor for a receipt with your company name on).
2. Although it's a best practice - nothing says you must use business bank account - https://moneysavinganswers.com/busin...-for-business/

Re point #2

Did you read the whole article, including this little snippet:

Now it's a given that if you have a limited company, you're not going to get away with using a personal bank account...

[ladymuck]

Hi.

I think I may have stupidly interpreted the rules and made a personal pension contribution that may incur a fine. Here's my case. I take the bare minimum salary 8788 and the rest as dividends. This year I took 39k in dividends. I took an additional 19k and made a personal contribution without realising that earnings count as "salary" i.e. my personal contribution limit for the tax year is 8788. I looked into carry forward rules and that is murky as ever. Can I salvage the situation? Or am I destined for a high tax bill?

Reading this, I think you're in the first scenario and you will just have to suck up the tax bill and learn your lesson for next time

https://www.moneymarketing.co.uk/ana...r-be-refunded/

[northernladuk]

Not sure what the issue is here. Pension providers will unwind any personal contribution and refund the HMRC for the 25% and return the original to the individual if asked by the plan holder.

Its a standard process, happens all the time.

As for the original poster, You are much better off making contribution through your Ltd company . That way you save on Corp tax and the higher dividend tax. But will NOT receive the topup.

If all in in this tax year see if your accountant can unwind the transactions. Return some of the dividends back and pay in to your pension via Ltd

Ah it's this post that's wrong, not mine. From LM's article

In most cases, the answer is no,

So the only post that needs deleting is this the one quoted

[Lance]

Hya.

Not an accountant. And even not contracting for too long. But I don't see the actual problem here.

1.in the accounting software you can claim it as an expense that just paid from your personal account (I have a few of these every year). The best practice is that you keep some evidence the expense was for company use (for example asking the vendor for a receipt with your company name on).
2. Although it's a best practice - nothing says you must use business bank account - https://moneysavinganswers.com/busin...-for-business/

so you're suggesting that the OP defraud the government?
If you pay personally, and then claim as an expense from the company you are saving CT, but also have the 20% top-up from the gov.
So no, you're not an accountant.
And that link is OK to a point but a really dumb idea when pensions are being paid.

[luxCon]

Reading this, I think you're in the first scenario and you will just have to suck up the tax bill and learn your lesson for next time

https://www.moneymarketing.co.uk/ana...r-be-refunded/

There is no need for that.

The OP can contact the pension administrator, asking for contributions to ne reversed and refunded. HMRC will get their 25% back.

https://www.pensionsadvisoryservice....aking-a-refund

https://www.aegon.co.uk/support/faq/...ributions.html

When can personal contributions be refunded?

(Minimise content)
There are very limited circumstances where personal contributions can be refunded. These are:

• where a cancellation notice is returned within the time limit.
• where an auto-enrolled worker opts out within the time limit.
• as a short service refund lump sum from an occupational pension scheme.
• where a genuine error has occurred.
• where an individual pays personal contributions that exceed 100% of their relevant UK earnings – this is called a refund of excess contributions lump sum.

[luxCon]

Ah it's this post that's wrong, not mine. From LM's article



So the only post that needs deleting is this the one quoted

Whatever,

But at least read her article properly


Drop in expected income

This a rarer situation overall but it is more likely to happen to contractors and the self-employed.

As you can only claim tax relief up to your UK relevant earnings, should a client’s earnings suddenly be less than expected, contributions could exceed the amount and they would not be eligible.

[ladymuck]

Whatever,

But at least read her article properly


Drop in expected income

This a rarer situation overall but it is more likely to happen to contractors and the self-employed.

As you can only claim tax relief up to your UK relevant earnings, should a client’s earnings suddenly be less than expected, contributions could exceed the amount and they would not be eligible.

That's not the OP's scenario. And rare, not "standard process, happens all the time" as you said.

[NotAllThere]

Off topic posts removed. Not everyone who has less than perfect English is a sockie.

[Lance]

Off topic posts removed. Not everyone who has less than perfect English is a sockie.

you missed one
https://forums.contractoruk.com/acco...ml#post2871731