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Possibly unusual question about director's pensions with micro-company



New Member
I have a micro-company. I am the sole director, shareholder and employee. It was incorporated in 2003.

I am in my early 60s. My father died 2022 and I recently received several 00s of 000s of inheritance. Most of this has initially gone into GIA accounts (though naturally I bought £20k of an ETF in an ISA account yesterday). I own my house outright so have no option of paying off a mortgage.

My company used to have about £60k turnover, but this is gradually winding down really: I now only accept jobs from clients so I do a reasonable/leisurely amount of work each month. I could "retire" tomorrow if I wanted to given the funds in my SIPP (and other investments).

Last year I learnt a bit more about pensions, and for example realised that a company director can be paid up to £60k to their SIPP by the company, regardless of their actual salary. My company pays me the LEL each year (currently £12570) as income.

I realise that my company will now probably never pay me another dividend, and instead will just direct everything over the LEL salary into SIPP payments to its director. We are all increasingly facing quite an increasingly "hazardous" fiscal landscape in this country, particularly if like me you have quite a bit outside tax shelters. The most tricky thing in that connection is the fast-disappearing CGT allowance: only £3000 this tax year.

So my question is: supposing I lend my company £60k right now, and my company then pays out a £60k director's SIPP contribution... but there is little likelihood that the company's profit will be more than £30k this financial year. The company would probably therefore make a loss. I might do that next year, and the year after. Then I might shut down the company. The company would close owing me personally a large amount of money. The cause would be the very large SIPP contributions it had been paying its director.

Is there anything in the above scenario which somehow contravenes tax or company administration laws and regulations?


New Member
More searching shows that this is a more common subject than I realised... and VERY involved. Trying to delete this thread but have no idea how.