IR35 Employer Pension Contributions IR35 Employer Pension Contributions
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  1. #1

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    Default IR35 Employer Pension Contributions

    Are contractors working with a public sector organisation through a PSC (ltd company) under IR35 deemed employment arrangements able to recover employer's national insurance contributions on company (PSC) pension contributions.
    There seems to be volumes written about IR35 but can't seem to find an answer - any clarification on this would be much appreciated.

  2. #2

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    Default Public Sector Explanation of IR35 Status

    My question relates to recent changes to ITEPA and IR35 regulations. Para 61T (sub para 4) of ITEPA (2003) -*Income Tax (Earnings and Pensions) Act , Part 2, Chapter 10: Workers’ services provided to public sector through intermediaries.

    This clause places a requirement on public sector bodies to provide a written explanation to contractors that explains why their contract has been deemed to fall inside the scope of the IR35 rules.

    Finance Act 2017

    I'm trying to improve my understanding of what options are open to resolve a situation where a public sector body refuses to provide a written response - the text of the legislation does not seem to present a clear explanation of the consequences of inaction.

  3. #3

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    In short, no, employer NIC's aren't reclaimable.

    Details here: http://forums.contractoruk.com/publi...ml#post2394879

    Re the written explanation, I think they have 30 days to respond to any request for an explanation - if you search around in the Public Sector IR35 sub forum you'll find what you're looking for, plus lots of other things about pension contributions.

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    That's hardly the best simplist answer.

    Basically you can't reclaim NI payments so to maximize your pension contributions if you have a public sector inside ir35 contract you want an umbrella that allows you to use salary sacrifice on all income beyond that which is required to pay you the living wage.

    Contractor umbrella is one umbrella company that I know is willing to do this. There may or may not be other umbrella companies willing to do the same but I've had no reason to try and identify them.
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  5. #5

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    Default Umbrella Company Employer Contributions

    Quote Originally Posted by eek View Post
    Basically you can't reclaim NI payments so to maximize your pension contributions if you have a public sector inside ir35 contract you want an umbrella that allows you to use salary sacrifice on all income beyond that which is required to pay you the living wage.

    Contractor umbrella is one umbrella company that I know is willing to do this. There may or may not be other umbrella companies willing to do the same but I've had no reason to try and identify them.
    I have been able to do this on and off over the past 8 years with Crystal and then Atlantic Umbrella. I was able to make significant contributions (when I was working) with either a 99% "Employer", 1% "Employee" split or more recently 100%Er/0%Ee. Unfortunately Atlantic are changing pension provider (from Scottish Widows to The Nest) and also changing payroll software. I've been told I will no longer be able to contribute in this way and my contributions will (as near as damn it) be 0%Er/100% Ee.

    Is anyone aware of any other umbrella companies that still allow contractors to set the Employer contribution? I'm being told that no umbrella will do this anymore for compliance reasons but there also appears to be a lot of miss-information and confusion. Does anyone know if this is even possible nowadays?

    Edit:

    There's an additional wrinkle I'd not appreciated when I first posted. Some umbrella companies appear to use salary-exchange for pension deductions (Atlantic and Crystal do not) and when this is the case the ER/EE split appears to be irrelevant as far as tax reduction is concerned as both contributions reduce the ER NI. Danbro appears to be one of these, Contractor Umbrella is another, I can't get a straight answer out of Parasol. All appear to allow one to increase the EE contribution but not the ER one.

    However an income assessment for a means-tested bursary for my son appears to be reduced by ER pension contributions but not EE ones so the EE/ER split is still relevant for me. I've yet to find an umbrella company however that works the way Crystal and Atlantic have been doing until recently with a 100%ER/0%EE (or 99%ER/1%EE) split.
    Last edited by simes1; 23rd May 2018 at 20:18. Reason: More information

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