Another pension question

[Archangel]

I want to stick a lump sum equal to my salary into my personal pension from my ltd company.

However, I’ve read that this may be challenged by HMRC because I have other staff who only receive the 5% mandatory contribution.

Does anyone have any experience of this? Or any advice

Ta

[Maslins]

I think what you've read sounds like BS to me.

The only possibly connected thing I can think of is that for corporation tax relief a cost has to be wholly and exclusively for the benefit of the trade. Sometimes you may have two partners jointly owning a company as it works nicely for them for tax reasons, eg one is a stay at home parent whilst the other is sole breadwinner. If the stay at home parent does no/negligible work for the company, this doesn't prevent them receiving dividends for their ownership, but can lead to questions being raised if they're being paid huge salaries or pension contributions which seem unreasonable relative to the level of work done.

[Archangel]

Ive been pointed to this

BIM46035 - Business Income Manual - HMRC internal manual - GOV.UK

Specifically

“
You should accept that the contributions are paid wholly and exclusively for the purposes of the trade where the remuneration package paid in respect of a director of a close company, or an employee who is a close relative or friend of the director or proprietor (where the business is unincorporated) is comparable with that paid to unconnected employees performing duties of similar value.
“

[Maslins]

Yes...but if you're the one running the business, then none of the employees have a role similar to yours, and it's perfectly justifiable that your salary/pension contributions are higher.

What it's getting as is if you're paying a friend/family member a ridiculously high salary/pension relative to their work commitment to the company.