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Previously on "Help with Pension laws"

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  • Archangel
    replied
    Originally posted by Archangel View Post

    You only have to have A scheme open, not THIS scheme. I’ve had a pension which I haven’t contributed to for 10 years, but I can put 120k in now (from the company) using carry back. Or I can put 120k in a new scheme.
    Actually it’s £160k (£40k for this year and 3 years carried forward)

    Leave a comment:


  • Archangel
    replied
    Originally posted by northernladuk View Post

    There are some rules around that though? You had to have the scheme open for those years don't you? Can't just open a scheme and put 120k in?

    Either way, hope the OP has decided to finally go get some expert advice on this.
    You only have to have A scheme open, not THIS scheme. I’ve had a pension which I haven’t contributed to for 10 years, but I can put 120k in now (from the company) using carry back. Or I can put 120k in a new scheme.

    Leave a comment:


  • luxCon
    replied
    Originally posted by Lance View Post

    pension advice on the back of a fag packet is not going to help the OP. The OP needs specialist help. From an accountant first, then maybe an IFA.
    This not a pension advice. Its Process Advise around a pension

    Leave a comment:


  • Lance
    replied
    Originally posted by luxCon View Post

    Yes, But the OP already has the plan open this year, so next tax year he/she can catchup the 20k easy.
    pension advice on the back of a fag packet is not going to help the OP. The OP needs specialist help. From an accountant first, then maybe an IFA.

    Leave a comment:


  • luxCon
    replied
    Originally posted by northernladuk View Post

    There are some rules around that though? You had to have the scheme open for those years don't you? Can't just open a scheme and put 120k in?

    Either way, hope the OP has decided to finally go get some expert advice on this.
    Yes, But the OP already has the plan open this year, so next tax year he/she can catchup the 20k easy.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by luxCon View Post

    You can contribute 3 prior years worth of pensions in to SIPP via Company Contributions. Thats 120k on top of your next year's allowance of 40k.
    So for the next tax year, you can do a catchup using your company's contributions to topup your SIPP provided you have not had Corp Tax liabilities closed yet. You obviously dont get the HMRC topup, but will pay no Corp tax, NI, or PAYE tax either.
    There are some rules around that though? You had to have the scheme open for those years don't you? Can't just open a scheme and put 120k in?

    Either way, hope the OP has decided to finally go get some expert advice on this.

    Leave a comment:


  • luxCon
    replied
    Originally posted by blazing View Post

    Thanks for your responses.

    This is a new SIPP account. So I have a couple of choices:

    1. Cancel the SIPP account within 30 day period. They return me the money and I return it to the company and cancel the dividend. End of story and I forget about contributing this year. I'll have to check with the accountant how to enter that data.

    2. Get SIPP provider to return 20000-8788 and I still pay a big tax bill due to 20K extra dividend i.e it remains personal contribution up to allowed limit.
    .
    .
    .

    Thoughts?

    PS: HL is just an example - it is not my SIPP provider

    Sorry, maybe too much details and I dont want to assume your circumstances.

    I think the first thing you need to do is get HL to refund the personal SIPP contribution over your eligible UK earnings.
    You CAN NOT ask for the 8788 eligible part back. I've done exactly this with a HL SIPP and they put the cash in to your Funds and Share account and pay HMRC back, and reduce your annual contributions. You need to sell your investments to the correct value .


    Call HL, you will wait about 20 mins on the phone but they will answer you. You are not entitled to the HMRC tax contributions, and you need to get the over payments reversed. It can be done and tell them your Eligible UK earnings for the tax year are only 8788.

    As for the divis, it maybe too close to tax year end to do much. At the very least I would treat 5k of it as Director's Loan and thus make the dividend 15k and return 5k back to LTD Company as refund of the loan.

    You can contribute 3 prior years worth of pensions in to SIPP via Company Contributions. Thats 120k on top of your next year's allowance of 40k.
    So for the next tax year, you can do a catchup using your company's contributions to topup your SIPP provided you have not had Corp Tax liabilities closed yet. You obviously dont get the HMRC topup, but will pay no Corp tax, NI, or PAYE tax either.



    Leave a comment:


  • blazing
    replied
    Originally posted by luxCon View Post

    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.
    Thanks for your responses.

    This is a new SIPP account. So I have a couple of choices:

    1. Cancel the SIPP account within 30 day period. They return me the money and I return it to the company and cancel the dividend. End of story and I forget about contributing this year. I'll have to check with the accountant how to enter that data.

    2. Get SIPP provider to return 20000-8788 and I still pay a big tax bill due to 20K extra dividend i.e it remains personal contribution up to allowed limit.

    3. Persist with the SIPP provider to make it company contribution - Cancel dividend. Basically, I opened the account and added money. By default, that counts as personal contribution. If a company contribution has to be made, a separate form has to be filled out and bank transfer has to be made from company account under normal circumstances. I was unaware of this process. Anyway, I spoke at length with the SIPP provider and asked if it could be made company contribution. After all, all that has happened is my company paid me and I paid the SIPP provider immediately. So, instead of money going direct from my company, it made it through my personal account. I did not benefit from that - so I don't think HMRC would mind that. There's no absolute requirement for company contribution to be made directly from company account. The SIPP provider told me that they don't think it is a problem to change it but a specialist would need to check. I have filled out the company contribution form and waiting for the confirmation.

    If you look at this company contribution form - https://www.hl.co.uk/__data/assets/p...ation-Form.pdf , it says -

    "Follow these steps to make a contribution to an employee’s HL SIPP by bank transfer (CHAPS/BACS/Faster Payment). If the company is not registered with Companies House in the UK, please first call us on 0117 980 9926. Payments should be made from an account in the employer’s name. If we cannot verify the source of funds we will require further evidence before we apply the money to your employee’s account. If we do not receive details of the contribution, we will return the funds to source."

    Since "should" is not a "must", it should be ok to make employer contribution from my personal account provided the SIPP provider is happy with source of funds.

    Thoughts?

    PS: HL is just an example - it is not my SIPP provider
    Last edited by blazing; 26 March 2021, 15:07.

    Leave a comment:


  • Lance
    replied
    Originally posted by NotAllThere View Post
    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

    Leave a comment:


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

    Leave a comment:


  • ladymuck
    replied
    Originally posted by luxCon View Post


    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.

    Leave a comment:


  • luxCon
    replied
    Originally posted by northernladuk View Post

    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.


    Leave a comment:


  • luxCon
    replied
    Originally posted by ladymuck View Post

    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.

    Leave a comment:


  • Lance
    replied
    Originally posted by Gulliver89 View Post
    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.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by luxCon View Post



    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

    Leave a comment:

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