SIPP pensions & IR35 changes for public sector Ltd co. Contractors
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  1. #11

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    Default SIPP clarification and further assistance request

    Quote Originally Posted by Bowgreave View Post
    I am in my 60s with a occupational pension and I have recently been working on a part time public sector contract through my own limited company. The company runs at a slight loss, on my contractors accountants advice. I have never paid myself a wage, so I have not needed to pay income tax or N I, as all the contracting income has been paid into my SIPP. Can I continue to legitimately do this once the responsibility for deducting income tax moves to the recruiting agency that pays me in April 2017?
    Thanks for all the useful pointers. I do fall under IR35 and I have hit OAP status (!) at 65. My contract recruiting agency, who effectively I charge in the first instance for my services, will allow me to salary sacrifice everything above a minimum wage into a pension, so that can remain tax-free. Am I correct in assuming that if I pay that minimum wage straight into my SIPP pension then I can reclaim the income tax deducted by the agency at source from my minimum wage in my self-assessment, but not the NICs?

  2. #12

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    Quote Originally Posted by Bowgreave View Post
    Thanks for all the useful pointers. I do fall under IR35 and I have hit OAP status (!) at 65. My contract recruiting agency, who effectively I charge in the first instance for my services, will allow me to salary sacrifice everything above a minimum wage into a pension, so that can remain tax-free. Am I correct in assuming that if I pay that minimum wage straight into my SIPP pension then I can reclaim the income tax deducted by the agency at source from my minimum wage in my self-assessment, but not the NICs?
    If you're already drawing a pension then presumably you're aware that a lower contribution limit may apply to SIPP contributions ? I say "may" because the lower limit applies if you're accessing your existing pension in certain "flexible" ways.

    If you are caught by the lower contribution limit then it's 10K in 2016/17 tax year, decreasing to 4K for 2017/18.

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    Quote Originally Posted by adubya View Post
    If you're already drawing a pension then presumably you're aware that a lower contribution limit may apply to SIPP contributions ? I say "may" because the lower limit applies if you're accessing your existing pension in certain "flexible" ways.

    If you are caught by the lower contribution limit then it's 10K in 2016/17 tax year, decreasing to 4K for 2017/18.
    Thanks for this but no that doesn't apply. They are 2 government pensions derived from my final salaries in 2 posts plus OAP and I keep my contract earnings under the amount I have to pay tax on to preserve the 20% HMG bonus.

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