(Sipp) Self invested personal pension

Hi @AEv,
Tax relief for all (net) contributions between the 6th through to 5th each calendar month sent to HMRC at the end of the month and should be paid out 22nd of the subsequent month.

i.e. If you were to pay in today 19th Feb, the tax relief would be processed with all other payments between 6th Feb – 5th March. There’s a reconciliation / checks process and they are sent to HMRC by the end of the month. HMRC would the pay out on the 22nd April. There may then a a day of so before the payment is applied to your account as there’s another checks process

This timeline is dictated to us by HMRC and our SIPP trustee partner. That said we are looking at what we can do to make this clearer on the app.

Thanks Tom.

Possibly a silly question, but I assume that in your example the HMRC relief paid 22nd April '24 would count toward the tax year 23-24 i.e. when the contribution was made?

Hi @tomj782 --yes, the HMRC relief is always linked to your contribution payment date in terms of which tax year / annual allowance. Great question though, always worth checking these things when it come to the tax man.


Is there a rough timeline for getting the ability for employers to make contributions to SIPP, can we expect it in the next couple of months?


Hi @bees9, I can only give a broad “next few months” estimate at the moment. Its being worked on but end of the tax year / ISA season can get very busy and these developments always take a little while with testing and new operational processes etc. We’ll try and keep you posted as best we can.

@aelita.cherniakova any update on when pension transfers will be introduced?

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Hi Carl, I’m afraid there is no ETA at the moment, but we will certainly post an update once this feature is introduced

Thanks for your reply @Paul_M

Thanks for the various updates @tom.winterton and @Paul_M

Would you be able to share the current ‘in progress’ areas of work on the SIPP product?

  • HMRC 20% tax relief is automated ‘Done’
  • can see mention of the ability for employer contributions seems to be ‘in progress’
  • the ability to transfer SIPP is ‘not started’ / no ETA

Are the above correct statuses?
and what other items are perhaps in the ‘in progress’ or ‘QA-approved / awaiting release’ status?

Hi @JHBEM - We are currently working on both transfers & employer contributions.

Its looking like we’ll open up SIPP Transfers early in the new tax year (after 6th April). We’ve had a lots of requests and we need to managed operational capacity, so we’ll enable limits groups of customers first (those you’ve contacted support will likely be first).

With regards to Employer contributions, I think it’ll slightly be after transfers.


Thanks for the swift update and that sounds great - indeed I was asking about the transfers from launch.
Fingers crossed and thanks for the hard work.

@Carl - see response.

SIPP transfer looks like it will drop to coincide asap post new tax year.

Hi @tom.winterton - I’m considering opening a SIPP and have been keeping an eye on this thread from for a while. Will it be possible to do a partial transfer from my current workplace pension into the SIPP i.e. still keeping my workplace pension open in order to benefit from employers contribution in my current workplace pension?

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Hi @rds - Yes, we intend to support partial transfers

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Thanks @tom.winterton!! Looking forward to the news in a few weeks!

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I have a question on this, since Employer contributions are not ready yet.

I have my own limited company (sole owner, sole director). Say I wanted to contribute £10k to a new pension; if I pay myself £10k via Dividends and then set up a SIPP with IE and claim the tax relief, would I achieve the same thing?

The problem word here is the word ‘Dividends’. If you paid yourself through PAYE then, yes, all £10k income could be used to pay into your SIPP and, to answer your question there would be no difference. Actually with an income of £10k you can only contribute £8k because you would have be assumed to have paid £2k in Income Tax and IE would reclaim that £2k from HMRC. [I have assumed that £10k is your only income.] However, if pay yourself £0 on PAYE but gave yourself £10k with dividends then you are restricted to the De Minimis limit of £2,880 net (£3,600 gross) because dividends do not count towards your SIPP contribution allowance.
I would have thought that contributions into a SIPP from an employee or employer are the same thing, it is just a payment into the account and as long as they both comply with the rules on maximum contributions then there is no problem. I suppose the issue for IE is that they would then have two bank accounts registered with them from which payments could be made and, I assume, HMRC are wanting to be sure that the correct systems are in place for that.

That’s super helpful, thank you. So if currently I’m on £10k PAYE (for NIC) plus £40k Dividends (£50k total to stay below the higher tax rate), then I’d have to increase my PAYE to £20k (taking my total to £60k and becoming a higher tax payer at 40% PAYE or 37.5% for Dividends).

If I add the £8k, IE would be able to add the 20% and reclaim from HMRC. Would I be able to recover the other 20% via self assessment?

Maybe it’s too much hassle and should look for a platform that allows employer contributions or wait until IE allows them.

This is not tax advice but I have done a bit of research at PTM043100 - Contributions: tax relief for employers: introduction - HMRC internal manual - GOV.UK It appears that any employer of a member of a registered pension scheme may make any amount of contributions to a registered pension scheme up to a combined contribution from the member and the employer of £60k.
That implies that you can keep your PAYE income at £10k and if you increase your dividends to £50 then your employer can pay £60k into your pension.
Certainly for a personal SIPP you could reclaim any higher rate Income tax under self assessment but I do not know what happens for a ‘registered pension scheme’. I suspect that since it is not on your self assessment then you would not be able to reclaim it. Obviously your company could reclaim the contributions from their Corporation Tax assessment.
Please do not take any of this as advice but since, I assume, that it is too late to do much for this tax year then I suggest that you leave it until the end of 2024 to see what happens at IE and in the meantime do your own research.

If you are a director/owner of a ltd company, you have two options for making pension contributions.

  1. Personal contributions
  2. Employer contributions

Personal contributions are grossed up 25% by HMRC. The max you can contribute in any given tax year is your PAYE earnings. Dividends don’t count. So if your income is £10K PAYE and £40K dividends, your personal contributions woul be limited to £10K.

Employer contributions aren’t grossed up by HMRC, but are eligible for corporation tax relief provided they are satisfy the “wholly and exclusively for the purposes of business” test set by HMRC. This condition is normally met by sole owner/directors of a company.

Employer contributions are normally more efficient at getting money out if your company than paying corporation tax and then dividends. To get dividends out, you will need to pay corporation tax at 19% or 25%, and then dividend tax of at least 8.75%.

But employer pension contributions can go in free of corporation tax. On the way out, based on current tax rates you will pay an average of 15% on the way out of a pension, assuming your penson pot is under £1.07m and your withdrawals in retirement in any given year are below the higher tax threshold.

Depending on how profitable your business is, you may want to consider maxing out your pension contributions (upto £60K can go in, plus unused allowances in three previous tax years, if you were a member of a pension scheme beforehand). Once you’ve maxed out pension contributions, I would consider paying yourself dividends to get your income upto £50K and then filling up your ISA allowances.

If you still have money left in the business after this, I’d consider following the recommendations set out here: https://www.foxymonkey.com/.

You can make employer pension contributions with SIPPS provided by Vanguard UK (debit card transactions only), Hargreaves, AJ Bell, Fidelity International, and interactive investor. Ther is some paper work needed to set this up.

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Many thanks for your comprehensive reply; much appreciated.