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Lump sum payment to employee's SIPP - how do I process this?

  • Member PM.Dip
  • Practice Licence
  • 71 posts
  • # 117815

Hello,

My sole trader, who employs his wife, would like to make a lump sum payment to his employee's SIPP.

I understand that it a business expense and so I would DR pension and CR bank, but I'm unsure as to how to put it through the payroll. Do I pay a bonus payment to the employee and then, somehow, mark it as a pension contribution (to get the PAYE and NI relief)? There is no pension set up in the payroll system at the moment. I'm using Payroll Manager.

Thanks in advance

Clair
accountsforme
  • Fellow PM.Dip
  • Practice Licence
  • 225 posts
  • # 117819

Clair said:

“

Hello,

My sole trader, who employs his wife, would like to make a lump sum payment to his employee's SIPP.

I understand that it a business expense and so I would DR pension and CR bank, but I'm unsure as to how to put it through the payroll. Do I pay a bonus payment to the employee and then, somehow, mark it as a pension contribution (to get the PAYE and NI relief)? There is no pension set up in the payroll system at the moment. I'm using Payroll Manager.

Thanks in advance

Clair

”

Paying into the pension has nothing to do with payroll in this case. Just do it as an expense. Her SIPP will not get tax releif as it is a contribution from an employer (The employer normally has to fill in a form stating the contribution has come from employer - submitting this to the SIPP provider).
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