Carrying Forward Pension Payments to a SIPP

[sus81]

I have been with a defined contributed pension since 2004 with Scottish Widows and have changed my provider to Vanguard SIPP. For the first time will be contributing as an LTD company instead of myself as a PAYE earner. I would like to carry forward 3 years of pension payments from my LTD company as i haven't put much into my pensions during this time. I just read that on Gov.uk"you must have been a member of a UK-registered pension scheme for the years you want to carry forward". I can answer yes to this but only as myself as a PAYE worker, or would this apply to my LTD company too as i am the director. I can add funds as a PAYE worker for previous years but have been paying myself a low salary so not sure if i can avail of this. Gov.UK says you can contribute maximum £40k in one year but I also read that you can only pay into your pension not any more than what you have earned. ie if you pay yourself £8k salary, this is the max (£8K) you can contribute into your pension for one year. Im finding it very confusing, i have an accountant but not sure he would have knowledge on this. Any information would be greatly appreciated.

 

[jb21]

@sus81 Formatting !

You are not the Limited Company.

The Limited company pension contributions are not restricted by the directors salary.

Deferred or active membership of any form of pension scheme qualifies you for carry forward.

£160K available from current and previous years less any grossed up contributions already made.

Accountants usually aren't qualified to give financial advice.

 

[sus81]

@jb21 This is great Thanks so much for the info.

 

[sus81]

@jb21 I just read this in an article saying the below. My company has only just registered with my new SIPP provider a few months ago. Prior to this i have been registered with Pension providers as an individual not my LTD company

"- you can carry over any leftover allowance from the previous three years, as long as your company Was registered in a UK-based pension during those three years"

• Limited company contribution limits
  
  The salary threshold doesn’t apply to the contributions you make through your limited company. But the £40,000 per tax year limit applies.
  
  Let’s say you pay £200 into your pension in 2022-23. Your company pays £40,000. In this case, you’ll be £200 over the limit. And you’ll have to pay tax on it.
  
  That said, you can carry over any leftover allowance from the previous three years, as long as your company:
  
  Was registered in a UK-based pension during those three years
  
  Made at least as much profit as you want to contribute
  
  Let’s say you set up a pension in 2018. Your company didn’t contribute anything in 2019, 2020, and 2021.
  
  In 2022, your company could pay £160,000 into your pension, as long as it makes at least that much in profit during the year.

 

[jb21]

@sus81 Don't trust everything you read on the Internet...

GOV.UK is trustworthy.

Disagree with several statements made in that Contract Eye article.

Read this article instead. Unbiased

 

[sus81]

@jb21 Thanks I saw the Unbiased article earlier and read this.

• If you have a large amount you'd like to contribute, you may be able to benefit from the 'carry forward' rule. This lets you make use of annual allowances that haven't been used over the previous three years, as long as you've been a part of a registered pension scheme during this time.

 

[jb21]

@sus81 Yes...

 

[sus81]

@jb21 I just saw this video where it says the pension company can be linked to the LTD company and the individual, so it might be ok.