Pension question inside/outside IR35
Discussion
I am currently paying into my pension via my limited company as advised by my accountant as this will offset any corp tax etc, and I make a decent contribution each month.
However, my current contract (outside IR35) has now ended and I am about to take an inside IR35 contract so PAYE and with the option to be enrolled into their pension scheme after 3 months, but I will opt out of this as and when the time comes.
Now my question is do I continue to pay my pension from my limited company even though there is no money coming into the business, I can make the same payments etc. Or do I switch my pension submissions to come from my personal account after PAYE.
Are there any implications to using my limited company for my pension, I am still an employee/shareholder or am I better of paying personally to avoid any tax complications.
However, my current contract (outside IR35) has now ended and I am about to take an inside IR35 contract so PAYE and with the option to be enrolled into their pension scheme after 3 months, but I will opt out of this as and when the time comes.
Now my question is do I continue to pay my pension from my limited company even though there is no money coming into the business, I can make the same payments etc. Or do I switch my pension submissions to come from my personal account after PAYE.
Are there any implications to using my limited company for my pension, I am still an employee/shareholder or am I better of paying personally to avoid any tax complications.
Freakuk said:
I am currently paying into my pension via my limited company as advised by my accountant as this will offset any corp tax etc, and I make a decent contribution each month.
However, my current contract (outside IR35) has now ended and I am about to take an inside IR35 contract so PAYE and with the option to be enrolled into their pension scheme after 3 months, but I will opt out of this as and when the time comes.
Now my question is do I continue to pay my pension from my limited company even though there is no money coming into the business, I can make the same payments etc. Or do I switch my pension submissions to come from my personal account after PAYE.
Are there any implications to using my limited company for my pension, I am still an employee/shareholder or am I better of paying personally to avoid any tax complications.
Personally in this situation I would try to retain any profits in the company and use the PAYE employment as the source of pension contributions by way of salary sacrifice to employer contributions if possible.However, my current contract (outside IR35) has now ended and I am about to take an inside IR35 contract so PAYE and with the option to be enrolled into their pension scheme after 3 months, but I will opt out of this as and when the time comes.
Now my question is do I continue to pay my pension from my limited company even though there is no money coming into the business, I can make the same payments etc. Or do I switch my pension submissions to come from my personal account after PAYE.
Are there any implications to using my limited company for my pension, I am still an employee/shareholder or am I better of paying personally to avoid any tax complications.
Have the conversation with the employer/client or any umbrella who would be processing payroll.
If you don't 'need' the Inside earnings for living then sacrifice as much as possible utilising any carry forward allowance you may have.
The various umbrella co's differ a bit on their salary sacrifice offering. If you haven't chosen already or been mandated by your new contract then make sure whoever you do choose will make payments to your chosen SIPP/Pension scheme.
You should also be able to ask them to give some worked examples of making various different levels of contributions. As the salary sacrifice means you also save on the employer contributions you should find it's worth maxing that (as long as you have sufficient disposable).
You should also be able to ask them to give some worked examples of making various different levels of contributions. As the salary sacrifice means you also save on the employer contributions you should find it's worth maxing that (as long as you have sufficient disposable).
Why would switching from outside IR35 to inside IR35 change the contracting party? Surely the client can still pay to your limited company (as opposed to paying you, personally) but simply net of PAYE tax?
"It’s possible to continue working through a limited company even if your current contract is deemed to be inside IR35. You’ll need to ensure you pay the correct PAYE tax and National Insurance (NI) for any contract which is inside IR35 because you are, in the eyes of HMRC, an employee. You can, however, manage this through your limited company."
https://www.crunch.co.uk/knowledge/article/can-ir3...
"It’s possible to continue working through a limited company even if your current contract is deemed to be inside IR35. You’ll need to ensure you pay the correct PAYE tax and National Insurance (NI) for any contract which is inside IR35 because you are, in the eyes of HMRC, an employee. You can, however, manage this through your limited company."
https://www.crunch.co.uk/knowledge/article/can-ir3...
Panamax said:
Why would switching from outside IR35 to inside IR35 change the contracting party? Surely the client can still pay to your limited company (as opposed to paying you, personally) but simply net of PAYE tax?
"It’s possible to continue working through a limited company even if your current contract is deemed to be inside IR35. You’ll need to ensure you pay the correct PAYE tax and National Insurance (NI) for any contract which is inside IR35 because you are, in the eyes of HMRC, an employee. You can, however, manage this through your limited company."
https://www.crunch.co.uk/knowledge/article/can-ir3...
Surely if you've ALREADY paid tax on it then putting it through your Company just complicates matters from an accounting point of view?"It’s possible to continue working through a limited company even if your current contract is deemed to be inside IR35. You’ll need to ensure you pay the correct PAYE tax and National Insurance (NI) for any contract which is inside IR35 because you are, in the eyes of HMRC, an employee. You can, however, manage this through your limited company."
https://www.crunch.co.uk/knowledge/article/can-ir3...
Panamax said:
Why would switching from outside IR35 to inside IR35 change the contracting party? Surely the client can still pay to your limited company (as opposed to paying you, personally) but simply net of PAYE tax?
Depends on the client. Certainly for myself and all bar 1 other contractor that I know the client wants the easiest least hassle path and so paying gross to an umbrella is that.scot_aln said:
Panamax said:
Why would switching from outside IR35 to inside IR35 change the contracting party? Surely the client can still pay to your limited company (as opposed to paying you, personally) but simply net of PAYE tax?
Depends on the client. Certainly for myself and all bar 1 other contractor that I know the client wants the easiest least hassle path and so paying gross to an umbrella is that.Your Ltd Co pension payments can only offset CT payments in the current accounting period. Once you tick over into a new accounting period and you have no contract there will be no profit to offset against. Even whilst there is you will only be saving somewhere between 19 and 25%
If you set up your Umbrella co to make salary sacrifice contributions into a pension you are potentially going to be saving 40/45% assuming you are a higher rate tax payer.
What is the current pension?
I have an II SIPP that I have paid I from both my Ltd and umbrella salary sacrifice, often both at the same time.
If you set up your Umbrella co to make salary sacrifice contributions into a pension you are potentially going to be saving 40/45% assuming you are a higher rate tax payer.
What is the current pension?
I have an II SIPP that I have paid I from both my Ltd and umbrella salary sacrifice, often both at the same time.
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