Salary, Pension & Dividends

by BrianJR at 14:59 11/03/16 (Ask-Legal-Accounting)

My accountant has recommended I contact you. I am 66 years old and retired from full time employment in Dec '14. I set up my own Ltd Co to allow me to do some Part Time Consultancy and started trading in May '15 and in this tax year will have a revenue net of VAT of circa £23K and will have circa £15K/16K cash available in the business by end March. I started to draw my state pension in Aug '15 but none of my occupational pensions.

Questions please: 1. As I have fully utilised my personal allowance for the current tax year (15/16) I have not, as yet, drawn any salary from my company as suggested by my accountant. A nominal salary has been paid to my co-director. I was considering having the company pay money into my SIPP in this tax year but want to try and understand how much I could realistically transfer and how this might be viewed by HMRC if no salary has been taken? Do I have to draw salary to allow this to happen? 2. In addition I was also anticipating drawing a dividend prior to 6 April as well and wanted to know how this would sit with not drawing a salary and paying into the SIPP? In essence I am wanting some guidance as to what value of salary (if necessary), pension payment and dividend could be acceptable in the circumstances? Kind Regards -- BrianJR Tweet

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