pension payment from my company

[cheeky_chops]

I did a 10 month stint during 2019-20 doing some IT contracting. In March 2020 i had about approx £30k in the business after salary/divis. Last invoice was paid in April 2020. I was intending to pay majority into my SIPP pension March 2020 but covid hit so missus and i agreed it wise to wait esp as she was furloughed.

Ive been permie for a while and no sign of that changing so need to decide what to do with the £35k left in the business - Im on a £50k salary so dont want to pay high rate tax on withdrawing the monies, id rather go back to original pension plan (esp as my pension is low).

Can i still pay the £35k into my SIPP without incurring any corp or personal tax? I believe im still on the payroll though taking zero each month. (My accountant says she cant give pensions advice)

[BlackG7R]

I have continued paying cash into my SIPP all year, but I've kept it as cash, as opposed to putting it into a fund of "stocks & shares"

I know they say the best strategy is to just keep trickling in money on a monthly basis. Pound cost averaging. But I just don't fancy putting any more into the market whilst it is so disconnected from reality.

[dingg]

BlackG7R said:

I have continued paying cash into my SIPP all year, but I've kept it as cash, as opposed to putting it into a fund of "stocks & shares"

I know they say the best strategy is to just keep trickling in money on a monthly basis. Pound cost averaging. But I just don't fancy putting any more into the market whilst it is so disconnected from reality.

The reality is the fed will keep pumping QE as will Europe as will the UK (we will do whatever it takes)

The market goes up in the grand scheme of things....

[BlackG7R]

Up to a point I agree with you, but in the end valuations will always come back to earnings, and they are waaay dooown. So all they are doing is setting us up for a bigger crash, whenever it does eventually come.

[trickywoo]

The corp tax will depend on the company year end.

Company pension contributions will reduce the profit in that particular year so if you make a contribution after the year end, and assuming no further profit, you will still have to pay the relevant corp tax.

If you are still within the company year and have £35k or more of profits a pension contribution will save you 19% corp tax (£6,650).

I'm pretty sure (but not certain) that the annual £40k limit on company contributions isn't dependent on you taking any PAYE earnings from the company at all.

[cheeky_chops]

trickywoo said:

I'm pretty sure (but not certain) that the annual £40k limit on company contributions isn't dependent on you taking any PAYE earnings from the company at all.

Cheers, yes thats what i had heard/read. Need to be certain as dont want HMRC coming for a shed load of tax!

[Stay in Bed Instead]

cheeky_chops said:

trickywoo said:

I'm pretty sure (but not certain) that the annual £40k limit on company contributions isn't dependent on you taking any PAYE earnings from the company at all.

Cheers, yes thats what i had heard/read. Need to be certain as dont want HMRC coming for a shed load of tax!

As long as you are a Director you should be fine, but nobody can give a 100% guarantee.