What's changed - FAQ

[cojak]

Thanks that's very helpful. It's hard to even get my accountant to understand my dilemma - he thinks I can just forget the public sector, but that really is my specialism so I just need to find the least damaging solution post-March. Noone seems able to tell me how much worse off I will be than my current situation - my own calculations seem to differ from the contractor umbrella, mainly because I am too stupid to know what % tax I would pay! But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

Also consider the (possibly) very least damaging solution of leaving your current contract and find a new one for 5th April.

[SueEllen]

Thanks that's very helpful. It's hard to even get my accountant to understand my dilemma - he thinks I can just forget the public sector, but that really is my specialism so I just need to find the least damaging solution post-March. Noone seems able to tell me how much worse off I will be than my current situation - my own calculations seem to differ from the contractor umbrella, mainly because I am too stupid to know what % tax I would pay! But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

The least damaging one for you is to find a different PS contract before April 5.

If HMRC decides to dig into your affairs you should then if you have insurance allow the insurer to point out the contract is completely different and not a continuation of a pre-April one.

[b r]

But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

Which is why on another thread I predicted a serious lack of staff available at the NHS over the Easter weekend, when all those 'freelancers' will have realised the hit on income and will decide not to cover the bank holiday weekend when the family is off etc.

[teapot418]

Not really. The best option for pensions is salary sacrifice and you can't do that if the agency is paying employers NI unless they are willing to pay directly into your pension instead.

Now if a financial advisor is willing to give me advice that differs from the advice I've already received I'm happy to change it but until then I will leave it as it is

A financial advisor is accountable for advice given, so it's unlikely they will put their neck on the line to say "this will happen" until the treatment of pension contributions has been confirmed.

I've no doubt the scenario you suggest is a likely outcome, but until it is confirmed it is a best guess.

[eek]

A financial advisor is accountable for advice given, so it's unlikely they will put their neck on the line to say "this will happen" until the treatment of pension contributions has been confirmed.

I've no doubt the scenario you suggest is a likely outcome, but until it is confirmed it is a best guess.

It's actually a very simple question!!!

Given the choice of paying for a pension via personal payments (and reclaiming the tax back) or getting someone to pay the money (including all the employers NI that was saved) which is the better option?

all my calcuations tell me salary sacrifice is better - the financial advisors I have asked confirm that its better yet still people query it without any evidence to back up their statements...

[eek]

But it looks like a 39% drop if I switched to the NHS payroll, a 28% drop if I stay as is via an agency but under IR35, and a 26% drop if I switch to an umbrella company. Grim, but I'm lucky I don't travel much so no expenses.

Which is why on another thread I predicted a serious lack of staff available at the NHS over the Easter weekend, when all those 'freelancers' will have realised the hit on income and will decide not to cover the bank holiday weekend when the family is off etc.

Aren't locum doctors / nurses / consultants already covered by IR35?

[teapot418]

It's actually a very simple question!!!

Given the choice of paying for a pension via personal payments (and reclaiming the tax back) or getting someone to pay the money (including all the employers NI that was saved) which is the better option?

all my calcuations tell me salary sacrifice is better - the financial advisors I have asked confirm that its better yet still people query it without any evidence to back up their statements...

I wasn't looking for an argument Just suggesting that we don't present things as 'fact' until they're confirmed. It may still be possible, depending on the final legislation, to 'get back' NI deductions if operating via a limited company, although I agree with your assessment that it probably won't. But it is still an unknown.

[eek]

I wasn't looking for an argument Just suggesting that we don't present things as 'fact' until they're confirmed. It may still be possible, depending on the final legislation, to 'get back' NI deductions if operating via a limited company, although I agree with your assessment that it probably won't. But it is still an unknown.

Which just goes to show that you don't understand how NI works - hint its not an annual payment but is based on what you earn that week..

And I'm not looking for an argument here but given I'm spending time triple checking stuff before posting it I would prefer people to correct things that need to be corrected by pointing me in the correct direction rather than going I don't think that's right without a link to evidence showing where I'm wrong...

[ladymuck]

Am I right in thinking that "expenses" doesn't just mean those incurred in the performance of the contract but all expenses incurred by YourCo? If YourCo has no income but has expenses (accountant, insurances, mobile phone, broadband, stationery, etc. etc.) they too can't be set off against your fees so YourCo will have a net loss and could potentially reclaim CT, or offset the loss should a gig in the next financial year be private sector?

[teapot418]

Which just goes to show that you don't understand how NI works - hint its not an annual payment but is based on what you earn that week..

And I'm not looking for an argument here but given I'm spending time triple checking stuff before posting it I would prefer people to correct things that need to be corrected by pointing me in the correct direction rather than going I don't think that's right without a link to evidence showing where I'm wrong...

I do understand how NI works.

There is no evidence. Could you point me at where HMRC have said NI contributions will not be allowed?

The problem is that there is no definitive answer at this point; just educated guesses which, in the most part will be right. My suggestion was that this should be made clear, as the people happening across this thread may well take the posts as 'gospel'. But I won't labour the point - I think the thread is helpful, and the pension situation you have described will likely be the end result, so I don't wish to detract from that.