Limited Company and SIPP

If you have a limited company, keep an eye on the profitability as it approaches the financial year-end because you can deposit a lump sum in the director’s SIPP to deplete the taxable profit. You’ll need to do it before the year-end date because it cannot be accrued.

Apart from the obvious corporation tax benefits, if you normally pay yourself a low salary or dividends for income tax purposes, you can deposit much more into your private pension tax-free and NI-free. Note that the ‘wholly and exclusively’ expenses rule must be satisfied.