Pensions - Ltd Co, 1 Director - How do you contribute?

[dbakes01]

Hi All,

I'm using the standard Ltd Company with 1 director setup and for the last year or so I've been contributing between £500-1k per month to a NEST pension that is in my personal name. My accountant seems indifferent (or simply doesn't know) about whether this is 'correct' and whether this means I can contribute 40k per year or not. They're fairly useless (you get what you pay for I suppose).

Could anyone clarify if I must have a pension setup in my company name or whether a direct debit to a personal pension is the same or equivalent to this, and if I'm doing something wrong, can I fix it?

Cheers for you help.
Dave

[Lance]

Hi All,

I'm using the standard Ltd Company with 1 director setup and for the last year or so I've been contributing between £500-1k per month to a NEST pension that is in my personal name. My accountant seems indifferent (or simply doesn't know) about whether this is 'correct' and whether this means I can contribute 40k per year or not. They're fairly useless (you get what you pay for I suppose).

Could anyone clarify if I must have a pension setup in my company name or whether a direct debit to a personal pension is the same or equivalent to this, and if I'm doing something wrong, can I fix it?

First up. You can't have a pension in the company name. A pension is a personal thing. You could setup an expensive company scheme but just don't bother.
You can pay into your pension from the company or your own pocket. But you need to make sure that the pension provider knows which is which as they are treated differently.

If you pay personal cash, the government will add tax more money (how much depends on your tax rate).
If you pay from the company the government don't add anything but you don't pay CT on that contribution.

Your best bet is to ring the provider.
After that read the other pension threads on these forums as you probably want a SIPP with really small management fees.

[northernladuk]

You shove brown envelopes full of used tenners through the letterbox.

HTH

[vwdan]

You shove brown envelopes full of used tenners through the letterbox.

HTH

Oh, can you still get ten pound notes? How quaint.

[northernladuk]

You shove brown envelopes full of used tenners through the letterbox.

HTH

How do you tip without them?

[vwdan]

How do you tip without them?

I don't tip - somebodies poor life choices are not my problem.

[northernladuk]

I don't tip - somebodies poor life choices are not my problem.

Hmm. Fair comment.

[MarillionFan]

How do you tip without them?

I use fifties obviously

[PhiltheGreek]

I use fifties obviously

The one's with Peter Rabbit on are worth more than their face value, so be careful not to tip with those.

HTH

[CoolCat]

I dont understand the original question

If you were paying the missus through the company payroll then there are issues about pension enrolement

As a single employee single director company you are exempt from enforced pension contributions, so its all about maximizing the tax advantage, best way to do that is to 1) setup a personal pension you are happy with 2) ask the pension company for form to arrange payments from your employer (your ltd but makes no difference to them) 3) then make payments from your ltd to the pension using those employer contribution forms. This is more tax efficient because you are not going to be paying national insurance and some company taxes on that money (if the payments show in the accounts appropriately)

Good luck