Inside Ir35 and pensions Inside Ir35 and pensions
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  1. #1

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    Default Inside Ir35 and pensions

    Has anybody on here had discussions with their agent (about to turn employer) and/or umbrella company about pensions when caught by Ir35?

    The agents that have been talking to contractors at my place (who are all about to switch to PAYE from Jan) are all quoting that 3% of the contractors rate/pay will, by default, be paid into their company pension scheme. However, nobody seems to know whether the contractors can tell the agent that they don't want to pay this 3% (opt out if you like) and instead direct part of their money (up to £40k) into their own existing SIPP.

    The pension route seems to be the only real benefit left for contractors under iR35 as the money can be directed towards a pension without paying any tax at all.

    It will be criminal if this will not be allowed as it will a final kick in the rocks just as we are falling to the floor.

    I have my initial meeting with agent tomorrow and I will discuss and get back to you.

    I find it strange that this does seem to have mentioned in any detail in any posts on here as the way I see it, its the most important aspect of being caught and maximising the pay.
    Last edited by mogga71; 13th November 2019 at 20:11.

  2. #2

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    I'm pretty sure (99%) that as an employee you do still have the right to opt out.

    Any suggestion otherwise, to me, would result in me querying it, and suggesting that I'll be taking it to the financial ombudsman.

    And no need to direct any money to your SIPP before PAYE. Just do it after and get the tax back.
    Last edited by Lance; 13th November 2019 at 19:43.
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    Quote Originally Posted by Lance View Post
    I'm pretty sure (99%) that as an employee you do still have the right to opt out.

    Any suggestion otherwise, to me, would result in me querying it, and suggesting that I'll be taking it to the financial ombudsman.

    And no need to direct any money to your SIPP before PAYE. Just do it after and get the tax back.
    I don't think thats correct. The pension payment is made before any deductions at all ... including Employer NI.

    If what you are saying is correct then this would not make any sense :

    Inside IR35? get huge tax savings with a pension

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    well, if you already know the answer, why ask the question?

    ffs.
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    Quote Originally Posted by BR14 View Post
    well, if you already know the answer, why ask the question?

    ffs.
    What?

    The questions above have not been answered have they? As has been said before, you are one annoying tool.

  6. #6

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    Quote Originally Posted by mogga71 View Post
    What?

    The questions above have not been answered have they? As has been said before, you are one annoying tool.
    aye, - right
    Entropy is NOT what it used to be.
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  7. #7

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    You need to find a brolly that will alow uncapped contributions to the pension. As far as I am aware there are only two.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  8. #8

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    Quote Originally Posted by mogga71 View Post
    I don't think thats correct. The pension payment is made before any deductions at all ... including Employer NI.

    If what you are saying is correct then this would not make any sense :

    Inside IR35? get huge tax savings with a pension
    That is half correct. If it will work as for permanents you have two options salary sacrifice (the pension is deducted from gross salary before any taxes) and the other option (don't know how its called) where the pension is deducted after taxes and you get a refund of the income tax paid.

    The salary sacrifice option is better as you (and the employer) can also save on NIC. I'm hoping that if I have to go PAYE under umbrella I will be able to put into my pension 50 or 60% of my gross salary by salary sacrifice so I stay below the higher tax income rate threshold. Take that HMRC...
    "The boy who cried Sheep"

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    Quote Originally Posted by northernladuk View Post
    You need to find a brolly that will alow uncapped contributions to the pension. As far as I am aware there are only two.
    Errrrrr .... can I ask who those 2 are ..... please?

  10. #10

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    Contractor umbrella and Clarity Umbrella.
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