NoLongerLimited, Prosperity 4

[tim123]

If you want to go brolly then I would suggest Parasol might be a better bet out of the two.

NLL, as I understand it from my conversation with the chief there, never allows contractors to opt in. If you want more flexibility to opt in or out, depending on what your working conditions are, then it's not such a good choice.

I'm still not convinced that a PAYE employee of a management company is allowed the choice. The legislation gives a "work seeker who is a limited company" the choice to opt out, but the management company is not the "work seeker" here.

tim

[tim123]

I can't agree. You can enter into something called income draw-down after age 55 under the new rules (and the old rules by the way) which means that you don't have to buy an annuity. Under the new rules you won't even be forced to buy an annuity after age 75 but can buy something else for pension purposes. Tax is payable on the draw down but you can then wait until annuity rates improve.

Even with draw-down it's still dead money. You can't touch it until 55 and then you can have 5% (is it?) pa. What about the other 95%

tim

[Bradley]

Tax-free

Even with draw-down it's still dead money. You can't touch it until 55 and then you can have 5% (is it?) pa. What about the other 95%

tim

well 25% of the fund value will be tax-free when you do decide to take pension commencement lump sum and the remaining 75% could be subject to income draw down at rates of up to 120% of the annuity rate.

So what if current PF value £200k. You make contribution of £100k from your copmpany.

In 5 years time fund value £380k = tax-free lump sum of £95k or 95% of your initial £100k sum invested plus a percentage of the tax-free uplift in value.

[tim123]

well 25% of the fund value will be tax-free when you do decide to take pension commencement lump sum and the remaining 75% could be subject to income draw down at rates of up to 120% of the annuity rate.

So what if current PF value £200k. You make contribution of £100k from your copmpany.

In 5 years time fund value £380k = tax-free lump sum of £95k or 95% of your initial £100k sum invested plus a percentage of the tax-free uplift in value.

Sorry, but 65K of this money was already there. You're not getting your money back at all. Talk about smoke and mirrors.

tim

[Bradley]

Practical effect

Sorry, but 65K of this money was already there. You're not getting your money back at all. Talk about smoke and mirrors.

tim

I don't know where you get the £65k from? Most people already have a pension fund of some description unless like you they're opposed to it on "idealogical" grounds and so dogmatic that they won't listen to any arguments against that point of view.

How about this one then? If you're 50 and you have the relevant earnings basis - post A day that will be salary and dividends taken - then it could cost you £60k to make a £100k contribution to your pension pot. That's £78k initially invested plus cheque for basic rate tax from Gordon Brown for £22k less £18k further higher-rate tax relief. If you were to recycle a tax-free lump sum prior to A day then the cost would be even less.

In five years you could then get a cheque for £95k following my example above.

What sort of return on investment would you need if you put £60k into property over 5 years to get similar sort of returns?

[bangface]

Tell them it's illegal to limit the right, it is a free choice by the worker. If they persist, refer them to the DTI and see how long they stay in business.

Yes, I agree with Malvolio on this one, this is extremely bad practice if NLL are actually pushing their guys to opt out of the regs. They should offer the individual an unbiased opinion as to the pros and cons of opting in or out of the regs depending on whether they are trying to work inside or outside of ir35. The ultimate choice should then be down to the individual to make.