Pension Contributions question?

[Fred Bloggs]

I don't want to begin looking at those sums but if you pay £1000 a month into a SIPP (as I do), the only other thing that happens is that's £210 corporation tax a month that you do not pay to Mr Darling.

[simmoz]

I am thinking of starting a SIPP..can anybody tell me if the table below is correct? It would seem that paying £1000 p/m into a pension direct from the company will cost me roughly £800 p/m less in my hand.


Director with 12k Salary + 12k Pension & Secretary 5k Salary
MakeUp of Invoice
Rate/Hour £48.00
Hours Worked 40.0
Amount Invoiced: £1,920.00
MakeUp of Proposed Payments
Net Salary Director (a) £231.00
Net Salary Secretary (b) £100.00
Standard Dividend Director @ 50% £512.56
Standard Dividend Secretary @ 50% £512.56
Total Payable (Director) £743.56

Total Payable (Secretary) £612.56

Total Payable £1,356.13
PAYE ('c) £28.00
NI (d) £17.41
Employers NI (e) £14.96
Deductions (a)+(b)+('c)+(d)+(e)+(f)+(g) £622.37
Expenses re-imbursed (f) Nil
PENSION CONTRIBUTIONS (g) £231.00
Company Net Profit £1,297.63
Corp. Tax (21% of Net Profit) £272.50
Net Profit after TAX £1,025.13
VAT @ 15% £288.00
Total Income inc. VAT £2,208.00
VAT Liability @ 12.5% / 11% £242.88

any help much appreciated..