Pension Carry forward from Contractor to Perm - Registered scheme only? Pension Carry forward from Contractor to Perm - Registered scheme only?
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  1. #1

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    Default Pension Carry forward from Contractor to Perm - Registered scheme only?

    I got a decent offer from my current client to go perm from April with a nice 1st year bonus. I'm thinking about taking it to weather out the storm for a year.

    I was thinking about doing a big salary sacrifice and piling a big lump of salary and also the bonus into my pension. Problem is, I'd be way over the £40,000 limit. Does anyone know, if I can use the 3 year carry forward rule to raise my limit? On reading, it says I have to be a member of a registered scheme and although I do pay some money into a SIPP from my company, I don't have any sort of registered pension scheme.
    Last edited by myso; 14th January 2020 at 00:22.

  2. #2

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    A SIPP is a “registered pension scheme.”

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    Quote Originally Posted by Amanensia View Post
    A SIPP is a “registered pension scheme.”
    Makes sense, thanks. I was thinking it was a registered company scheme they were talking about.

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    Quote Originally Posted by myso View Post
    Makes sense, thanks. I was thinking it was a registered company scheme they were talking about.
    Type in pension carry forward in to google and the very first link that comes up explains it in great detail and f me! There is an example of exactly what you are asking at the bottom.

    Carry Forward Annual Allowance
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    You might want to ask your new employer if they are actually willing to do a pension contribution in excess of £40K.

    While you are at it, you might want to mention that the salary sacrifice is saving them a whacking 13.8% on employer's NI. They'd have recovered about 2.7% of that on CT, so it's net about 11.1%. So if they are putting, say, £60K into a pension for you it's saving them £6.6K net NI. Ask them to top up the pension contribution by 11% to reflect how much you are saving them on NI. Or, if that feels just a wee bit greedy, ask to split the difference with them and ask for an extra 5%.

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    Quote Originally Posted by northernladuk View Post
    Type in pension carry forward in to google and the very first link that comes up explains it in great detail and f me! There is an example of exactly what you are asking at the bottom.

    Carry Forward Annual Allowance
    Not sure why you have such a keen interest in trying to make others out to be muppets, with inferior research skills to your own glorious talents, but whatever. However you decide to fill these long winter evenings is your own business and I hope the many man years of your life on here in a similar vein have provided you with the feelings of superiority you seemingly so crave.

    The nuance in my question was around whether I was a member of a registered pension scheme, given that have I never contributed a single penny personally to any pension in the last 3 years. Quoting from the gov.uk:
    You cannot carry forward unused allowances from any tax year where you were not a member of at least one UK registered pension scheme, or a qualifying overseas pension scheme.
    My question was whether my company paying into a SIPP and me being a member of a registered pension scheme were two entirely different things. We can't all be as sophisticated to these nuances as your Lordship, so I decided to ask to clarify. This is an accounting and legal forum and we can't all be accountants and lawyers now, can we?


    Quote Originally Posted by WordIsBond View Post
    You might want to ask your new employer if they are actually willing to do a pension contribution in excess of £40K.

    While you are at it, you might want to mention that the salary sacrifice is saving them a whacking 13.8% on employer's NI. They'd have recovered about 2.7% of that on CT, so it's net about 11.1%. So if they are putting, say, £60K into a pension for you it's saving them £6.6K net NI. Ask them to top up the pension contribution by 11% to reflect how much you are saving them on NI. Or, if that feels just a wee bit greedy, ask to split the difference with them and ask for an extra 5%.
    Aye, my next move is to clarify with them once I find out the lay of the land around the carry forward rules. Not a bad idea asking about a cut of the NI savings. I'm nothing if not brass-necked, so I'd certainly give it a go.
    Last edited by myso; 14th January 2020 at 23:23.

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