IR35 and pension

[swamp]

If you work inside IR35 but pay most or all of your income as personal pension, would this effectively negate IR35?

[BR14]

no.

[swamp]

no.

Is this because the Ltd is still paying employer's NI?

[WordIsBond]

If you work inside IR35 but pay most or all of your income as personal pension, would this effectively negate IR35?

Depends. If you are working for a small company, yes, it would. Under the reform coming in with larger companies, no, you'd lose the national insurance. Still might be worth doing to avoid higher rate income tax, of course.

[swamp]

Depends. If you are working for a small company, yes, it would. Under the reform coming in with larger companies, no, you'd lose the national insurance. Still might be worth doing to avoid higher rate income tax, of course.

Thanks. Would working via umbrella company and using their (company) pension scheme work to mitigate IR35?

[northernladuk]

What is this mitigate/negate IR35 thing of which you speak?

[DeludedKitten]

If you work inside IR35 but pay most or all of your income as personal pension, would this effectively negate IR35?

Possibly.

I have had an inside IR35 contract and paid the vast majority of that income into my pension plan because I received the income gross and it's my responsibility to deduct the right level of taxes. This won't be possible after the changes come in next year, since it's not my repsonsibility to do that any more.

[Paralytic]

Possibly.

I have had an inside IR35 contract and paid the vast majority of that income into my pension plan because I received the income gross and it's my responsibility to deduct the right level of taxes. This won't be possible after the changes come in next year, since it's not my repsonsibility to do that any more.

You can (to some extent) if you go with an Umbrella that allows flexible salary sacrifice pensions payments. ie. you can put the full £40K (or more if you want to pay tax) into a pension each year. Granted many (most?) Umbrellas do not allow this, but a couple of the regulars who post on these boards do.

[coder]

You can (to some extent) if you go with an Umbrella that allows flexible salary sacrifice pensions payments. ie. you can put the full £40K (or more if you want to pay tax) into a pension each year. Granted many (most?) Umbrellas do not allow this, but a couple of the regulars who post on these boards do.

You can pay it net and reclaim on tax return

[DeludedKitten]

You can pay it net and reclaim on tax return

But you can't reclaim the National Insurance that has been deducted.