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IR35 and pension

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    IR35 and pension

    If you work inside IR35 but pay most or all of your income as personal pension, would this effectively negate IR35?
    Cats are evil.

    #2
    no.

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      #3
      Originally posted by BR14 View Post
      no.
      Is this because the Ltd is still paying employer's NI?
      Cats are evil.

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        #4
        Originally posted by swamp View Post
        If you work inside IR35 but pay most or all of your income as personal pension, would this effectively negate IR35?
        Depends. If you are working for a small company, yes, it would. Under the reform coming in with larger companies, no, you'd lose the national insurance. Still might be worth doing to avoid higher rate income tax, of course.

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          #5
          Originally posted by WordIsBond View Post
          Depends. If you are working for a small company, yes, it would. Under the reform coming in with larger companies, no, you'd lose the national insurance. Still might be worth doing to avoid higher rate income tax, of course.
          Thanks. Would working via umbrella company and using their (company) pension scheme work to mitigate IR35?
          Cats are evil.

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            #6
            What is this mitigate/negate IR35 thing of which you speak?
            'CUK forum personality of 2011 - Winner - Yes really!!!!

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              #7
              Originally posted by swamp View Post
              If you work inside IR35 but pay most or all of your income as personal pension, would this effectively negate IR35?
              Possibly.

              I have had an inside IR35 contract and paid the vast majority of that income into my pension plan because I received the income gross and it's my responsibility to deduct the right level of taxes. This won't be possible after the changes come in next year, since it's not my repsonsibility to do that any more.
              I'm not fat, I'm just fluffy.

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                #8
                Originally posted by DeludedKitten View Post
                Possibly.

                I have had an inside IR35 contract and paid the vast majority of that income into my pension plan because I received the income gross and it's my responsibility to deduct the right level of taxes. This won't be possible after the changes come in next year, since it's not my repsonsibility to do that any more.
                You can (to some extent) if you go with an Umbrella that allows flexible salary sacrifice pensions payments. ie. you can put the full £40K (or more if you want to pay tax) into a pension each year. Granted many (most?) Umbrellas do not allow this, but a couple of the regulars who post on these boards do.

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                  #9
                  Originally posted by Paralytic View Post
                  You can (to some extent) if you go with an Umbrella that allows flexible salary sacrifice pensions payments. ie. you can put the full £40K (or more if you want to pay tax) into a pension each year. Granted many (most?) Umbrellas do not allow this, but a couple of the regulars who post on these boards do.
                  You can pay it net and reclaim on tax return

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                    #10
                    Originally posted by coder View Post
                    You can pay it net and reclaim on tax return
                    But you can't reclaim the National Insurance that has been deducted.
                    I'm not fat, I'm just fluffy.

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