Directors Pensions - Help

[QueenBee20]

Hi,

New here ! First post so please accept my apologies if this is posted in the wrong section!

I am a Director of a Ltd company, our year end is fast approaching , and I would like to reduce the companies profits by starting and paying a lump sum into a Directors Pension.

Can anyone offer advice on the best way to do this ?

For context , this will be the first pension contribution for myself and one other director. Looking at paying in about £5k each. We have employees with the SMART pension already in place but this does not include the Directors.

Ideally I am looking for a scheme that is quick to set up (before tax year end) , with low management and set up fee's , and one that I can easily view / add funds to online or via an app.

And , of course, I also want to make sure that I am not making any Tax boo boo's during the process.

Thanks in advance

 

[Financial-Modeller]

Given that you are considering this 5 working days from the end of the tax year, with pension providers likely to be under pressure in terms of advisors etc, speed would seem to be of the essence.

Can your existing provider of employee pensions open a SIPP for you in the time available?

If not, try Hargreaves Lansdown. ( https://www.hl.co.uk/pensions/sipp )

Remember in either case that you don't have to make investment decisions immediately, you just want to get the SIPP open, and cash transferred from your company to the SIPP if possible.

Speak to your accountant though - in certain circumstances you might be able to pay funds in to the current year after year-end.

Also with £5k contribution, planned for this year and £35k or less planned for 2020/21, it might not matter much if you open the account you want with the provider that you choose at your leisure, and make this years' contribution next year.

 

[QueenBee20]

Hi , Thank you for the reply. I have run the option that you have suggested past my accountant to see if this could work.

 

[UK Contractor Accountant]

the tax year end is irrelevant -If its going to be a company contribution the important date is the company's year end date.

 

[UK Contractor Accountant]

f not, try Hargreaves Lansdown. ( https://www.hl.co.uk/pensions/sipp )

Other SIPP providers are available

https://www.moneysavingexpert.com/savings/cheap-sipps/

 

[QueenBee20]

Ah yes I can see that I didn't mention in my original post that the companies year end coincides with the tax year. Hence the rush.

 

[UK Contractor Accountant]

How quickly can I set up a SIPP?
How long it takes to set up SIPP depends on the type of account you choose. If it’s your own account to which you will be the sole contributor, it could take less than 30 minutes to create your SIPP account, online.

Where you’re setting up a SIPP for employer or third-party contributions, the process will likely take longer. The form will need to be filled in by the SIPP account contributor and then processed by the provider you’ve selected. However, if you ensure the paperwork is filled in and sent off promptly, it shouldn’t take too long, for the completion of your SIPP account set up.

 

[theainz]

Arent there significant charges on a SIPP? Though, if you are interested in lending into property or buying your premises this can be worthwhile investigating I think.

 

[QueenBee20]

Unsurprisingly I missed the bait for the end of year for the pension. Gives me time to research the best options this year anyway!

We currently rent our premises from the council so buying wouldn’t be an option for us at the moment. I have invested into property already and I was looking at a pension to spread the risk of my investments. Thank you for the suggestions

 

[dotcomdude]

Arent there significant charges on a SIPP?

We've got SIPPs with hl.co.uk and as we moved all of the money about a year ago into cash funds (thinking there was a crash coming), there are no charges. In fact we get a tiny amount of interest on it each month.

I definitely recommend these for employer pension contributions, although from memory it did take a week or two to set up that side of it.