Reply to: Are you all using SIPPs now?

[hugebrain]

Wouldn't be very tax efficient though, because if Tesco is paying staff employer pension contributions having made a loss, that money is coming from retained earnings from previous years which has already been taxed via corporation tax I think.

Yes it would since the nice people at HMRC give you back the corporation tax if you make a loss (and bigger pensions mean bigger losses).

But don’t do it because pretty soon you may find yourself on minimum wage and paying £15,000 a month into a SIPP!

[GJABS]

I’m pretty sure you can go into a loss. Tesco don’t stop paying their staff pensions if they make a loss one year - so it should be the same for Yourco. I think there’s something vague about it being reasonable or something.

(but as I said before it’s not a great idea pay yourself a pension from your company anymore)

Wouldn't be very tax efficient though, because if Tesco is paying staff employer pension contributions having made a loss, that money is coming from retained earnings from previous years which has already been taxed via corporation tax I think.

[hugebrain]

Well in a SIPP you are investing it rather than it sitting in a business bank account at 1%... unless your company owns shares (presumably it can?)

Yes, my company owns shares. It’s a bit of a mix which is better - with the company the money is a bit more accessible and you can use profits to pay yourself a salary for example.

[hugebrain]

And IIRC there is no annual limit at all on what your company can contribute (so the date is not a factor) as long as you don't go into a loss.

I’m pretty sure you can go into a loss. Tesco don’t stop paying their staff pensions if they make a loss one year - so it should be the same for Yourco. I think there’s something vague about it being reasonable or something.

(but as I said before it’s not a great idea pay yourself a pension from your company anymore)

[d000hg]

Don’t make any contributions from your company. Keeping the money in the company is almost the same as having it in a SIPP anyway (you defer the tax until you take it out).

Well in a SIPP you are investing it rather than it sitting in a business bank account at 1%... unless your company owns shares (presumably it can?)

[sadkingbilly]

Most people on here put up figures in GBP, while HB uses ZWD

KPW more like

[WTFH]

yeh, 'course you will

Most people on here put up figures in GBP, while HB uses ZWD

[sadkingbilly]

If you ever have to endure the horrors of an inside IR35 contract you will need your pension allowances. If I work for the full year (inside) I will pop 180,000 into my SIPP which cuts my tax rate from 50% to 20% and neatly sidesteps all that higher rate tax business.

yeh, 'course you will

[hugebrain]

I got the feeling a lot of people have gone the SIPP route these days so just wondered how you handle it.

TIA.

Don’t make any contributions from your company. Keeping the money in the company is almost the same as having it in a SIPP anyway (you defer the tax until you take it out).

If you ever have to endure the horrors of an inside IR35 contract you will need your pension allowances. If I work for the full year (inside) I will pop 180,000 into my SIPP which cuts my tax rate from 50% to 20% and neatly sidesteps all that higher rate tax business.

[GJABS]

Happy new tax year everyone

Yes I know the tax setup but I was curious once the funds are in your SIPP/ISA do you use different investment strategies for the two? I was considering that I might effectively mirror them if I went with a SIPP so e.g if the ISA owns 23% of X, 34% of Y and 43% of Z, so does the SIPP - as I buy or sell in the ISA I mirror the same % holdings in the SIPP so I view it as one portfolio split across two different containers.

I don't treat them any differently from each other, with one exception: I have lower-risk lower-return investments in my pension, compared with my ISA, because I want to reduce the risk of it going above the £1 million limit after which you are taxed very heavily on it. Although the government has recently removed this extra tax, Labour say they are going to re-instate it if they get into power. There is no benefit to taking this risk. So if I am lucky enough to get my pension close to £1M in due course I am likely to sell everything and sit on cash instead.

[d000hg]

Your company can pay into it.

Just make sure you mark it as an employer contribution.

And IIRC there is no annual limit at all on what your company can contribute (so the date is not a factor) as long as you don't go into a loss. But for personal pensions you can roll over 3 (4?) years contributions so if you haven't been making contributions before, again the 5th is probably not an issue.

[56samba]

On whose side? The pensions company? My accounts/freeagent?

The Pension company, so they dont try and claim the tax back as if it were an employee contrib.

[PerfectStorm]

Your company can pay into it.

Just make sure you mark it as an employer contribution.

On whose side? The pensions company? My accounts/freeagent?

[SueEllen]

With the end of FY today, is there anything one can do to get money into a pension of some sort?

I have an old permit pension that takes incoming payments by Faster Payment, can my company pay into that or do you need to do something else? Or if you're not looking to max out the 40k for the year does it matter if its done this week or next?

Your company can pay into it.

Just make sure you mark it as an employer contribution.

[PerfectStorm]

With the end of FY today, is there anything one can do to get money into a pension of some sort?

I have an old permit pension that takes incoming payments by Faster Payment, can my company pay into that or do you need to do something else? Or if you're not looking to max out the 40k for the year does it matter if its done this week or next?