Contractors: IR35 & general discussion

[Guvernator]

mikef said:

Paystream Max were able to do this (set %age, different amount each month) to a number of pension providers, including three that I was already using

It was one of the reasons that I didn't go with other umbrellas that came highly recommended - in some case their choice of pension providers was "Nest or SJP", which was a huge red ffag

I'm with paystream but not on the max setup which I believe you pay extra for. Might give this a go. My pension is with Quilter\Old Mutual who are on their "approved" list too but I'm still not sure if this is paystream making it difficult or the pension provider so going to max may mean I pay the umbrella more money and it still doesn't work.

Shouldn't be this difficult.

[Ranger 6]

Olivera said:

Ranger 6 said:

Olivera said:

I'll be pedantic once more, but there are usually three categories of contractor:

1) Via PSC - IR35 does not apply, determined as Outside IR35
2) Via PSC - IR35 applies, determined as Inside IR35 (extremely rare, lots of obscure accounting rules apply)
3) Not via PSC - IR35 does not apply, normal payroll employee (Umbrella/Agency etc)

OK - so what am I missing? (Be gentle )

Where's
4) Not via PSC - Contractor assignment rate includes Employers NI, Apprenticeship levy, Day rate etc. Contractor has none of the employee payroll benefits - pension, sick pay, health care etc.

I am in an 'inside' contract - paid via umbrella. I do not have any benefits that a payroll employee does and my contract is limited to a maximum of 23 months due to HMRC legislation.

That's category 3.

'Contractor assignment rate includes Employers NI, Apprenticeship levy, Day rate etc' - these are all details agreed between the end client and the Umbrella.

'Contractor has none of the employee payroll benefits - pension, sick pay, health care etc' - yes you do, you'll have at least the statutory minimum that must be given to employees. You'll accrue holiday pay and mandatory pension contributions, and be eligible for sick pay, the same as any other employee. See your Umbrella for more info.

You're not the same as any other employee though, as the pension and holiday pay accruals are funded from the assignment rate - not from the employer (umbrella). And sick pay is 'only' SSP after self certification - you don't get paid while you're going through the self certification period. There is a whole number of detail differences which separate a contractor from an employee - Company funded social activities, personal development, performance reviews, etc etc.

So a contractor still has to pay for all their own 'benefits' from the money received from the client company, however, instead of being able to manage all that and make their own choices through a Ltd company the management is done by someone else who then just gives them the remains.

[Blown2CV]

Guvernator said:

mikef said:

Paystream Max were able to do this (set %age, different amount each month) to a number of pension providers, including three that I was already using

It was one of the reasons that I didn't go with other umbrellas that came highly recommended - in some case their choice of pension providers was "Nest or SJP", which was a huge red ffag

I'm with paystream but not on the max setup which I believe you pay extra for. Might give this a go. My pension is with Quilter\Old Mutual who are on their "approved" list too but I'm still not sure if this is paystream making it difficult or the pension provider so going to max may mean I pay the umbrella more money and it still doesn't work.

Shouldn't be this difficult.

you shouldn't have to pay more to do salary sacrifice. It's part of the basic package with parasol and also foretwo who i used previously.

[Guvernator]

Blown2CV said:

you shouldn't have to pay more to do salary sacrifice. It's part of the basic package with parasol and also foretwo who i used previously.

Allegedly it's part of Paystreams standard package too but in reality I couldn't get it setup. The hurdle was that because it's not a direct debit, my pensions provider need to run a mini suitability assessment each time as a BACS transfer is treated as a one-off payment.

I also wasn't offered a percentage of pay option, it was a set amount taken off my day rate.

I guess it's a system designed to stop people investing in something without getting proper financial advice but just seems really stupid and not applicable in this case. I'm just adding money to my existing pension pot.

I'm thinking now this may be a pension provider issue rather than a paystream issue.

[Ranger 6]

Guvernator said:

I'm thinking now this may be a pension provider issue rather than a paystream issue.

I would suggest it is - Paystream take a fixed amount per day from my rate and pay it to my pension on a monthly basis. I was asked a few questions when it started, but once rolling it's fine.

[Blown2CV]

Guvernator said:

Blown2CV said:

you shouldn't have to pay more to do salary sacrifice. It's part of the basic package with parasol and also foretwo who i used previously.

Allegedly it's part of Paystreams standard package too but in reality I couldn't get it setup. The hurdle was that because it's not a direct debit, my pensions provider need to run a mini suitability assessment each time as a BACS transfer is treated as a one-off payment.

I also wasn't offered a percentage of pay option, it was a set amount taken off my day rate.

I guess it's a system designed to stop people investing in something without getting proper financial advice but just seems really stupid and not applicable in this case. I'm just adding money to my existing pension pot.

I'm thinking now this may be a pension provider issue rather than a paystream issue.

parasol rather helpfully used some of a NI rebate and added it to my pension contributions through SS. This was unexpected but obviously welcome, however as it then meant the amounts weren't what the wealth advisor was expecting, something similar happened to me.

[Guvernator]

Blown2CV said:

parasol rather helpfully used some of a NI rebate and added it to my pension contributions through SS. This was unexpected but obviously welcome, however as it then meant the amounts weren't what the wealth advisor was expecting, something similar happened to me.

Yep my pension is setup through an FA too and that was even more of a nightmare as they'd need to carry out a full affordability assessment, every time I made a BACS payment (for direct debits they only need to do this once at the start)

So I agreed with my FA that I'd not go through him and pay straight to the pension provider but even that wasn't simple. Just seems very very complicated when I'm trying to give them money, it's almost like they don't want it.

I understand rules are in place to stop people getting bad advice or ripped off but there should be a mechanism where you can waive all this paperwork if all you are doing is adding to your existing pension pot and you aren't an idiot.

[Blown2CV]

i guess there are AML and tax evasion rules they'd need to navigate