Ideas for legitimate expenses..

[Hiram King Of Tyre]

Pension payments don't avoid tax though, they just delay it (although you can take 25% tax free.

The limitation for me is that the accountant advises that pension payments shouldn't exceed salary

[DaveB]

This is not the plaice for jokes like that...

It all sounds a bit fishy to me.

[dude69]

Pension payments don't avoid tax though, they just delay it (although you can take 25% tax free.

The limitation for me is that the accountant advises that pension payments shouldn't exceed salary

He's wrong, that change on A Day, a couple of years ago.

[Hiram King Of Tyre]

He's wrong, that change on A Day, a couple of years ago.

I believe you're right but he's worried about the "wholly and exclusively" test

[dude69]

I believe you're right but he's worried about the "wholly and exclusively" test

But that's wrong too. As he is running a one-man company, and generating all the income, his package is clearly a commercial rate for the job, and there is no possible argument that a handsome package for the only person bringing in any income is not "wholly and exclusively" for the purposes of the job.

If he was giving a £50k/year pension to his secretary/wife, then yes, that would not be "wholly and exclusively" for business purposes

[ASB]

Surely even if one is worried about making a 25k payment say just increase salary by 25k then do a salary sacrifice of 25k and have the company make the payment. ??

Net result is the same but the theoretical salary has increased by 25k.

[Hiram King Of Tyre]

I do like the idea of making high pensiion payment for 3 reasons:

1. I'm 49 in June so can get 25% tax free before the age goes back to 25
2. It reduces the impact of any IR35 decision going against me
3. It reduces the "worthwhile" factor for an IR35 investigation