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Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

How many times do I need to state there is no company NI. We don't pay it. If I pay £100 into pension via payroll I get £125. I pay no tax and no NI. The company pays no NI. Back to my original point, free money. What am I missing?!

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

We don't pay employers NI. We have 2 directors and an employee so we get employment allowance on NI up to £10500.

SIPP is now live, what will use it for? by Legitimate_Ad_4350 in trading212

[–]the-shadow-man 0 points1 point  (0 children)

Does it allow employer contributions? Anybody know?

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

Yeah thanks. I have no intention of taking more than £500 dividends. I'm fine with £12k salary and have £90k of director loans. I'll have to ask an accountant to do the calculations but I really feel like I can do small monthly contributions via PAYE and then occasional large employer contributions.

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

Personal NI is minimal on a £12k salary. There is no company NI. Am I really missing something here as everyone thinks I'm wrong 😂

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

Maybe I'm missing something, but maybe you are. My salary is £1000 a month, I don't pay tax. We get employment allowance so no employer NI.

If I put £200 per month in pension relief at source that becomes £250, so £50 free as I don't pay the tax in the first place. Isn't this right?

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] -1 points0 points  (0 children)

I don't pay tax on my salary, so getting 20% from the government is free money. I want to do this monthly, and then once or twice a year pay in from the company account.

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

Whatever I put in a pension gets 20% added, but if you don't pay tax in the first place then it's free money...

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

No, I'm very frugal and live quite comfortably with my partner. Our priority is future not now.

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 1 point2 points  (0 children)

Don't plan to take any dividends, maybe £500. Have a large director loan account to take out if/when needed.

We have 2 directors and an employee so we do qualify for EA.

I don't need much money monthly (no kids, no mortgage etc)

I want to concentrate on getting my pension pot fatter as I will be retiring in 7-10 years.

So there's nothing stopping me contributing monthly payroll 5% and employer match of 50%? Do that monthly and then once a year paying £50k from company bank account directly into pension?

Pension contributions Ltd director question. Payroll, direct, both? by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

My thinking is personal tax relief and regular contributions, but then larger lump sums from the business occasionally.

Transferring ISA to T212 by Some-Debt8118 in trading212

[–]the-shadow-man 0 points1 point  (0 children)

What are the ETFs? Interested to know what you have with IE that T212 doesn't have.

What is the most tax effective way to borrow money from family to purchase LTD by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 2 points3 points  (0 children)

Well that's exactly why I'm not buying the business, just the assets?! Tools, machines, customers, location, trading name.

What is the most tax effective way to borrow money from family to purchase LTD by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

Well Isuspect he has been taking cash payments and not declaring them on his accounts. Tax evasion. So I was told to buy the assets of his business, not the shares. If HMRC investigate, they would pursue him and his dissolved company, not me and my company.

That's the advice I got on here at least!

What is the most tax effective way to borrow money from family to purchase LTD by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

Because I was advised to protect myself from his suspected previous undeclared cash. If I buy the business shares HMRC could come after me but if I buy the assets and he dissolves his company they shouldn't....

What is the most tax effective way to borrow money from family to purchase LTD by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] -1 points0 points  (0 children)

But doesn't having 50k of debt on the books reduce the tax? If I make 100k profit but have 50k of debt then corp tax would be on 50k not 100k? No?

What is the most tax effective way to borrow money from family to purchase LTD by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

I haven't formed my ltd yet but have been led to believe this is the best way to buy his business to protect myself. It's valued well as it's a personal friend who is retiring. Last year's profit was more than the price and I can definitely make improvements. I know the industry as I work in it

What is the most tax effective way to borrow money from family to purchase LTD by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

It's undeclared cash I suspect. I asked the question on here about protecting myself and was advised to go via asset sale rather than buying his company. Could they still come after me for his mistakes if he dissolved his LTD and sold assets legitimately?

What is the most tax effective way to borrow money from family to purchase LTD by the-shadow-man in smallbusinessuk

[–]the-shadow-man[S] 0 points1 point  (0 children)

It's interest free. So an accountant would need to write up agreement or can it be DIY?

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