supply teaching - company formation

[princeperch]

this is probably a straight forward question for those in the know.

my mother in law used to be a head teacher. she retired about 2 years ago and is in receipt of her teachers pension at about 20k odd a year. she is not yet receiving the state pension and wont for a few years.

a school she used to work at has asked her to go back every now and then as a supply teacher on an occasional basis. no set days, just as and when required.

I presume she has a few option here:

1) join a supply agency and ask the school to deal with them;

2) go down the umbrella company route although from what I understand this is a bit dubious;

3) create her own company from off the shelf, and she then bills the school directly for her service as and when and retains an accountant to do her tax return when required - I think this would probably be the best option for her;

any thoughts or comments would be much appreciated..

[UpTheIron]

How many days / year? Will help rule out the cost effectiveness of a Ltd pretty quickly.

Umbrella not dubious and probably the most cost effective - presumably much the same as a "supply agency"?

Are you familiar with IR35? I would presume a supply teacher would be firmly inside?

[Simpo Two]

or 4) bills the school directly for her service as and when and retains an accountant to do her tax return when required - no Company needed.

[Sheepshanks]

If it's one particular school, will they not pay her on a PAYE basis?

[alfie2244]

Will her pension be affected if she goes direct?

[Twin2]

A family friend is doing this, he was head of a department, retired and now supply teaches.

A business may well be the best way because they were paying him PAYE and over a certain threshold he starts to chip away his pension. Before christmas he hit that limit so would have been working for free if he didn't decline to go back after the break.

Perhaps having a business and taking dividends would mitigate this?

[Sheepshanks]

alfie2244 said:

Will her pension be affected if she goes direct?

It could be if she earned enough but the OP said it's only occasional.

[alfie2244]

Sheepshanks said:

alfie2244 said:

Will her pension be affected if she goes direct?

It could be if she earned enough but the OP said it's only occasional.

That's very true.... not an expert but I think she will be ok until pension plus income exceeds final salary so occasional should be fine.

[Lynch91]

Simpo Two said:

or 4) bills the school directly for her service as and when and retains an accountant to do her tax return when required - no Company needed.

^ do this.

[princeperch]

Lynch91 said:

Simpo Two said:

or 4) bills the school directly for her service as and when and retains an accountant to do her tax return when required - no Company needed.

^ do this.

Ta all

Will suggest this in the first instance and see what the school says.