What's changed - FAQ

[eek]

Doesn't every option give you the chance to push for employment right?

Fix term contract will have some, going onto PAYE will give you some, umbrella will give you some. The way I see it, working for your own limited company is one of the most convoluted ways to get those rights because they would come from the other routes to work but not necessarily from your own company.

Yep they give you rights as they factor them in to how they pay you. The reason for going to a tribunal however is the difference between:-

Umbrella £27 an hour including your holiday pay / sickness
Public Sector via tribunal - £27 an hour for every hour worked. Holiday pay / Sickness is on top of that £27 instead of being part of.

And public sector pensions are still final salary based...

[eek]

For pension payments with your employer, salary sacrifice is your friend. If they offer it. You can't make the employer do it, IIRC.

Yep which is why I don't expect Agencies to offer it, but umbrella companies can and do offer salary sacrifice (although I will note that the umbrella does need to pay you the national minimum wage, only amounts above that can be put in your pension).

[Fred Bloggs]

Yep they give you rights as they factor them in to how they pay you. The reason for going to a tribunal however is the difference between:-

Umbrella £27 an hour including your holiday pay / sickness
Public Sector via tribunal - £27 an hour for every hour worked. Holiday pay / Sickness is on top of that £27 instead of being part of.

And public sector pensions are still final salary based...

Hmm, not entirely true.

Three close family members of mine are all PS employees. Defined Benefit (final salary) schemes are gone.

One has a true money purchase scheme, albeit with employer contributions.
One has a career average scheme with reduced accrual rates too along with retirement age gone up from 60 to 67.
One has a career average scheme or an option to have a defined contribution scheme at lower contribution levels.

So, what you said isn't quite true.

[Fred Bloggs]

Yep which is why I don't expect Agencies to offer it, but umbrella companies can and do offer salary sacrifice (although I will note that the umbrella does need to pay you the national minimum wage, only amounts above that can be put in your pension).

Sadly, as a brolly employee, you also pay your employer for the privilege of working for them too. I'm guessing you pay a brolly about GBP 50 a week just to employ you? No tax relief on that either, to boot. Kind of adds up when you're paying 42% tax, eh?

[eek]

Sadly, as a brolly employee, you also pay your employer for the privilege of working for them too. I'm guessing you pay a brolly about GBP 50 a week just to employ you? No tax relief on that either, to boot. Kind of adds up when you're paying 42% tax, eh?

Most are a lot less than £50 a week.... The £50 a week ones will be paying healthy kickbacks to be on the agency's preferred supplier list.

In fact contractor umbrella's fee is £29.50 a week. The weekly take home pay for a £300 a day contract drops to £903.24 or just £15.81 less than my original IR35 calculation above.

[eek]

Hmm, not entirely true.

Three close family members of mine are all PS employees. Defined Benefit (final salary) schemes are gone.

One has a true money purchase scheme, albeit with employer contributions.
One has a career average scheme with reduced accrual rates too along with retirement age gone up from 60 to 67.
One has a career average scheme or an option to have a defined contribution scheme at lower contribution levels.

So, what you said isn't quite true.

sorry yes that should be defined benefit based rather than contribution based,

[SueEllen]

Yep which is why I don't expect Agencies to offer it, but umbrella companies can and do offer salary sacrifice (although I will note that the umbrella does need to pay you the national minimum wage, only amounts above that can be put in your pension).

Agencies have to auto-enrole agency workers unless they are short term ones, and only the pension scheme itself can get you to opt out.

So it will be between you and the scheme how much you want to contribute from your salary.

[Fred Bloggs]

Agencies have to auto-enrole agency workers unless they are short term ones, and only the pension scheme itself can get you to opt out.

So it will be between you and the scheme how much you want to contribute from your salary.

That's not the same thing SE. Under that scenario you still get ErNIC docked out of your rate before you get it. With salary sacrifice you get save the ErNIC which would otherwise be paid and be irrecoverable.

[SueEllen]

That's not the same thing SE. Under that scenario you still get ErNIC docked out of your rate before you get it. With salary sacrifice you get save the ErNIC which would otherwise be paid and be irrecoverable.

Sorry I didn't make myself clear.

When you pay into a pension the scheme provider leaves it up to you how much should automatically be taken from your salary before NI.

In a employer scheme where the employer matches/puts a percentage for a certain level of contributions they give boxes on the form for you to tick but there is always an option to put in a larger payment.

If you are one of many people who doesn't return the forms in time or at all, they will automatically just take the lowest contribution and it's up to you to sort the mess out.

[Fred Bloggs]

Sorry I didn't make myself clear.

When you pay into a pension the scheme provider leaves it up to you how much should automatically be taken from your salary before NI.

In a employer scheme where the employer matches/puts a percentage for a certain level of contributions they give boxes on the form for you to tick but there is always an option to put in a larger payment.

If you are one of many people who doesn't return the forms in time or at all, they will automatically just take the lowest contribution and it's up to you to sort the mess out.

That's still costing you ErNIC though, SE.