SIPP info needed

[mrdonuts]

can anyone confirm that you can pay the majority of your earnings into a sipp

e.g company earns £80k take £10k as salary then company pays the other £70k into a sipp

[Little'Old Me]

In theory, yes you could do this. However in practice you need to find a SIPP provided who will let you!

The administrator/trustees are responsible for making sure you stay within the rules and many of the rules haven't been tested and I get the feeling no trustee wants to be the first to test it! This is because if they allow you to do something and it turns out to be wrong, they are personally liable!

There is specific wording about what is allowable as a company contribution, but its a bit vague!

If I can find the time in the next few days I'll let you know what it is!

[mrdonuts]

thanks that would be helpful

[Coalman]

I'm looking into this myself at the moment.

According to the info I have read your co can contribute the equivalent of your employee income each year to a limit of 235k each year.

Now I'm not sure what contributes employee income, is it just salary or is it all income - salary + dividend.

[rootsnall]

Theoretically you can do it BUT I think the phrase is 'at the discretion of your local tax inspector'. My accountant talked me out of it and advocates a rule of matching your salary ie. 10K salary, you can pay 10K into your SIPP.

[NickNick]

Same advice I got from mine.

[ASB]

Or consider upping your salary from 10k to 80k and then doing a 70k salary sacrifice into the SIPP

[moorfield]

My accountant talked me out of it and advocates a rule of matching your salary ie. 10K salary, you can pay 10K into your SIPP.

+1

I think this is generally regarded as the accepted approach.

[Little'Old Me]

Your best bet would be to find out how much the SIPP company will allow.

I know a company director (salary £5k a year plus dividends) who paid £100k into his SIPP each year for the last 3 years. But even after this, the company still made a taxable profit of £150-200k.

I used to have a web site on SIPPS, but I got bored maintaining it! I have all the original info used to set it up on another computer.

[rootsnall]

Or consider upping your salary from 10k to 80k and then doing a 70k salary sacrifice into the SIPP

I think you must lose your employer's NI that way ? Anybody know how that works out ? I suppose I should ask my accountant.