Inside IR35 contract, can my limited company take the responsibility of fee payer

[sunilgokani]

If I were to take a contract inside IR35, could I work through my limited company, and my limited company be the fee payer. I understand that limited company would be responsible for PAYE and company NI payments. The thinking is that the limited company would be paid gross, could make company pension contributions before PAYE calculations.

[jamesbrown]

If the Chapter 10 rules apply (i.e., the client is responsible for the SDS, Fee Payer is responsible for payments), then no. Hint: if you don't understand that last sentence, then "no". The Fee Payer has a legal obligation to make the deductions and YourCo is, by definition of the legislation, not the Fee Payer. Of course, if the Fee Payer is willing, they can make payments to YourCo after all deductions, but you're better off with an umbrella in that situation because they can make pension payments under salary sacrifice.

The only way you can stick with YourCo and operate under the Chapter 8 rules (aka "old IR35") is when the client is small or the supply chain is fully overseas. In that case, YourCo will be paid gross and can make pension contributions as normal (and YourCo then operates a deemed payment to you if YourCo determines that the contract is inside IR35).

[jamesbrown]

I mean, this was the whole point of Chapter 10, to take away your option to self-assess IR35 status and to place this responsibility (and liability) with the supply chain above YourCo. Everything else flows from that.

[northernladuk]

Most reputable umbrellas will allow you to make pension contributions to your defined plan so better off doing that.

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