Umbrella companies and pension providers

[DolanContractorGroup]

Its a moot point though - my next gig has made a blanket determination about the use of PSCs, so by association (wrong word) the "role" is Inside IR35. That's why I think some of my initial conversations with brollies have been difficult because I'm answering their basic questions about SDC in a way which makes the role seem outside (as it would have been a few months ago). Its all a bit of a contradiction really.

They haven't actually made a blanket determination, as that's not allowed. They've just said that they don't want the hassle/risk of dealing with PSCs under the reforms.

Theoretically though, a role could have MOO, No RoS, but no SDC and be deemed inside (two of the three pillars failed).

The same role through a brolly still has no SDC so is expense allowable?

Unlikely, yes, possible, also yes.

Agreed.

That's why it's best to do an assessment.


Kind regards

Zeeshan

[eatenrifles]

They haven't actually made a blanket determination, as that's not allowed.

My client has. Everyone in, no exceptions. Not interested in disputes.

You can still operate through a PSC if you want, but the agency will pay net to it.

[DolanContractorGroup]

My client has. Everyone in, no exceptions. Not interested in disputes.

You can still operate through a PSC if you want, but the agency will pay net to it.

Hi eatenrifles,

That's not a blanket determination. The legislation states that the end client has to make reasonable efforts in its assessments, otherwise they're in hot water.

Not sure if you're in FS but what's happening in the financial services sector is that banks are just refusing to deal with the reforms by saying that it's PAYE or umbrella only from 6 April.

And your agency can't pay net into your company without the client giving you an SDS specifically stating the 'inside' decision.

Thanks


Zeeshan

[eatenrifles]

Hi eatenrifles,

That's not a blanket determination. The legislation states that the end client has to make reasonable efforts in its assessments, otherwise they're in hot water.

They made no reasonable effort in their assessment. I know what the guidance says, they didn't follow it. Still waiting for them to be in hot water though.

Not sure if you're in FS but what's happening in the financial services sector is that banks are just refusing to deal with the reforms by saying that it's PAYE or umbrella only from 6 April.

I'm not in FS, and that's not what's happening here.

And your agency can't pay net into your company without the client giving you an SDS specifically stating the 'inside' decision.

They did.

[eek]

My client has. Everyone in, no exceptions. Not interested in disputes.

You can still operate through a PSC if you want, but the agency will pay net to it.

Well you can't raise a dispute until April but I suspect if you did you would be terminated immediately...

[eatenrifles]

Well you can't raise a dispute until April but I suspect if you did you would be terminated immediately...

I raised one anyway. No reply as yet (although they’re not obliged).

Currently working on an exit strategy.

[Silverskin]

Thank you for posting this. I'm in the same boat; looking at options to minimise the impact of taking an inside-IR35 contract by maximising pension contributions. Ideally, I'm looking for an umbrella that not only supports contributions to my existing SIPP but will also support using the 'carry forward' option to utilise the last three years of unused pension contributions.

So far I have spoken to Orange Genie. They confirm they will support contributions to my own SIPP and will allow 'carry forward'. They charge £20 per week. Unfortunately the agent won't do business with them so I'll be phoning round some of the others in the next few days.

Hi,
does anyone know from that list of umbrellas which ones don't allow carry forward for the SIPP contributions? I'm particularly interested in Nasa and Paystream in this respect.

Also does anyone know how easy it is to change your SIPP contribution during the tax year, should the need arise? How does that work if you lose your job for example?

[Paralytic]

Hi,
does anyone know from that list of umbrellas which ones don't allow carry forward for the SIPP contributions? I'm particularly interested in Nasa and Paystream in this respect.

Any carry forward is your business only and the umbrella has no sight of that. So, the real question is, what is the minimum you need to pay yourself each month in order that the umbrella can meet their legal requirements and you can make the maximum pension contribution possible.

One umbrella told me, on an illustrative day rate of £500, the minimum gross paid could be £400/week, meaning pension contributions of a little over £2000 per week.

This provides a notional 90+% fund retainment level, but that obviously ignores that the pension could be taxed once in drawdown and you’d likely need have to have a personal war chest (or a partner that can support you) for living expenses until you can do that.

Doing this can also tie into a model where your PSC has funds and you keep paying yourself dividends. Of course, there are the inherent risks (and costs) in keeping it open.

[northernladuk]

Changing contributions is easy. If its self administered you just change it on the portal. I believe with Clarity offering you just advise them and they'll change it there and then. I'd imagine the others are similar if they allow unlimited payments.

[Silverskin]

Any carry forward is your business only and the umbrella has no sight of that. So, the real question is, what is the minimum you need to pay yourself each month in order that the umbrella can meet their legal requirements and you can make the maximum pension contribution possible.

One umbrella told me, on an illustrative day rate of £500, the minimum gross paid could be £400/week, meaning pension contributions of a little over £2000 per week.

This provides a notional 90+% fund retainment level, but that obviously ignores that the pension could be taxed once in drawdown and you’d likely need have to have a personal war chest (or a partner that can support you) for living expenses until you can do that.

Doing this can also tie into a model where your PSC has funds and you keep paying yourself dividends. Of course, there are the inherent risks (and costs) in keeping it open.

Well exactly, I don't see how the umbrella company can have an issue with carry forward but apparently some do. Maybe someone else is able to comment on this?