Inside IR35; PAYE v Umbrella Inside IR35; PAYE v Umbrella
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  1. #1

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    Default Inside IR35; PAYE v Umbrella

    Market isn't too bad for roles at the moment for me, a steady number of outside roles at decent rates (public sector so don't have to worry about if the are outside now and change to inside after April), however due to remote working I am exploring inside roles where the project is appealing.

    Usual outside rate is £500 a day, and I have been quoted as £600 per day or £447 PAYE + 12.07-14.54% accrued holiday + pension, I am assuming the £600 will be the brolly rate.

    I have a couple of questions, firstly around holiday, I assume with PAYE it will be use it or refunded at the end of the contract, I don't normally take time off when in a contract so I doubt I will be taking any time off, working from home all the time means I don't really need to! Do brolllys not have to deal with holidays?

    Secondly around pension, I've a SIPP with HL and from what I've read few if any brollys will pay into my pension, someone mentioned NASA might but I would like this confirmed, but brolly is still the best way to pay into pension. I assume the pension "offered" with PAYE is the 3% legal minimum that an employer now needs to offer but it will come from me anyway, it's just a diasctintion of when the employers NI would be calculated.

    On the surface of it the bolly comes out with more cash in my pocket (£1909 a week v £1400), but do the "extras" on the PAYE do anything to close this gap? I assume any pension I have at the end of the PAYE engagement I can transfer to my SIPP but at a cost
    Contracting is like plumbing. You're your own boss until you walk into someone's house and they tell you to take your shoes off.

  2. #2

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    Yes a number of brollies will pay in to existing pensions. It's been a steady exodus to this position as non of them did this time last year so it's constantly changing. Time to do a bit of leg work and go find a brolly that does what you want and you are happy to deal with. They are going to be dealing with potentially 100's of K of your money so up to you to make sure you go find the right one for you.

    You can get ideas from the Umbrella section of the forum. Tons of recent discussions about pensions and I do believe there is a thread discussing which offer them but it's going to be out of date.

    To search use the google method. Type <keywords> site:contractoruk/forums
    To narrow it down to just the umbrellas then you can use the URL for that particular area. So a good start for you would be umbrella sipp site:contractoruk.com/forums/umbrella-companies/
    That brings back a raft of posts on exactly this topic.

    As you can imagine PAYE vs Umbrella has been done extensively as well so try that in the search terms.
    Last edited by northernladuk; 26th November 2020 at 13:15.
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  3. #3

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    My advice - always umbrella with salary sacrifice...

    As for the rest of your questions - everything (Employer NI, pension, apprenticeship levy, holiday pay) is hidden / included within the open invoice / umbrella rate - the sooner someone gave a standardised name and definition of the rate the agency pays the umbrella the better.
    Last edited by eek; 26th November 2020 at 13:27.
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  4. #4

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    I'm using JSA brolly ( £10 a week ) and paying into an HL SIPP, hassle free so far.

    Doing a fag packet calculation I think the £447 is with the employers NI being paid before you receive it, so 447 + Employers NI + 12.07-14.54% accrued holiday + pension is approx £600. Ask them to clarify.

    So I think it'll depend how much you want to pay into your SIPP. Anything over and above the PAYE pension would make the brolly the better option tax and NI wise.

  5. #5

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    Do they need any Business Analysts

    Another vote for Brolly with Pension Sacrifice. That’s exactly what I’m going to be doing when I find myself inside somewhere.

  6. #6

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    Quote Originally Posted by rootsnall View Post
    I'm using JSA brolly ( £10 a week ) and paying into an HL SIPP, hassle free so far.

    Doing a fag packet calculation I think the £447 is with the employers NI being paid before you receive it, so 447 + Employers NI + 12.07-14.54% accrued holiday + pension is approx £600. Ask them to clarify.

    So I think it'll depend how much you want to pay into your SIPP. Anything over and above the PAYE pension would make the brolly the better option tax and NI wise.
    Just got the agents list of Umbrella companies and JSA are on there, how you finding them?
    Contracting is like plumbing. You're your own boss until you walk into someone's house and they tell you to take your shoes off.

  7. #7

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    Quote Originally Posted by InsertWittyNameHere555 View Post
    Market isn't too bad for roles at the moment for me, a steady number of outside roles at decent rates (public sector so don't have to worry about if the are outside now and change to inside after April), however due to remote working I am exploring inside roles where the project is appealing.

    Usual outside rate is £500 a day, and I have been quoted as £600 per day or £447 PAYE + 12.07-14.54% accrued holiday + pension, I am assuming the £600 will be the brolly rate.

    I have a couple of questions, firstly around holiday, I assume with PAYE it will be use it or refunded at the end of the contract, I don't normally take time off when in a contract so I doubt I will be taking any time off, working from home all the time means I don't really need to! Do brolllys not have to deal with holidays?

    Secondly around pension, I've a SIPP with HL and from what I've read few if any brollys will pay into my pension, someone mentioned NASA might but I would like this confirmed, but brolly is still the best way to pay into pension. I assume the pension "offered" with PAYE is the 3% legal minimum that an employer now needs to offer but it will come from me anyway, it's just a diasctintion of when the employers NI would be calculated.

    On the surface of it the bolly comes out with more cash in my pocket (£1909 a week v £1400), but do the "extras" on the PAYE do anything to close this gap? I assume any pension I have at the end of the PAYE engagement I can transfer to my SIPP but at a cost
    1909 ??? How do you get this?

    More like net 1550 I would think


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  8. #8

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    Quote Originally Posted by InsertWittyNameHere555 View Post
    Just got the agents list of Umbrella companies and JSA are on there, how you finding them?
    Good. I was with Liberty Bishop and got transferred over to JSA, I assume they bought them. I was sure something would go wrong on the transfer but it didn't. Mistake free after 2 months or so including the SIPP payment to HL. I got the £10 a week deal with Liberty Bishop, not sure what they'll try to charge you as a newbie. You set a percentage of gross to pay into the SIPP.

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