Contractor Among Contractors
IR35 Avoider Game over man, GAME OVER!
Can you put 75K into a pension? (There is a 50K a year limit, but you may also be able to use unused allowances from three previous years.)
Alternatively, you could put you contract earnings there.
Or some combination of the above.
This will help with tax, though of course you may not want to postpone using the money until age 55.
If you are IR35-caught it may not be possible to postpone your earnings into a different year. In that case the pension option is particularly attractive, as pension contributions are treated the same as salary in reducing your IR35 liability.
It's possible that part of the redundancy payment could be paid directly into a pension. Not sure if there is NI on redundancy, if there is there might be additional savings from doing that. All ex-employer would have to do is fill in a simple form and write a cheque to your pension scheme.
Last edited by IR35 Avoider; 24th April 2012 at 09:24.