Returning NHS workers

[webberg]

Agreed, and that was my point. It is valid that someone could chose to put £40K into their pension and take £17,500 as salary.

So, the 85% line is not wrong and we can't assume any one scheme is "dodgy" without seeing details. It could just be they've used underhand marketing to lure people in.

But I do think that site is just an aggregator/introducer, so are probably just taking the highest % that any of their affiliates advertise.

I'd like to meet that one person in the UK who would be able to put £32,000 cash into a pension, £1,000 in tax, perhaps another £1,000 in NIC, perhaps £1,500 in umbrella fees, leaving £20,000 before travelling to work and buying groceries for a year.

Advertising standards require ads to be reasonable, honest and not misleading. I'm sticking to my guns to say that the webpages are misleading.

[Paralytic]

A £250/day contract x 230 days? is £57,500 annualised.

How likely is a £40,000 pension contribution that requires £32,000 in cash?

Might be arithmetically possible but is practically not.

This is what really, really annoys me with umbrellas. They max out positions using totally impractical and improbable assumptions just to gain an extra 1% or 2% over perceived rivals.

Agreed, and that was my point. It is valid that someone could chose to put £40K into their pension and take £17,500 as salary.

So, the 85% line is not wrong and we can't assume any one scheme is "dodgy" without seeing details. It could just be they've used underhand marketing to lure people in.

But I do think that site is just an aggregator/introducer, so are probably just taking the highest % that any of their affiliates advertise.

[webberg]

I looked back at the illustrations I got and I see now they were based on a request to max out pension payments, including previous years allowance. In that case, the retention level can actually exceed 95%.

If the pension contributions are limited to £40K in a year, and assuming a full year contract at a good day rate (eg, £500/day), I can see that 85% would be difficult to reach.

However, with a lower level of contract rate (eg, £250/day), and £40K contributed to a pension (£833/week), then isn't it still possible to achieve a 85% retention?

A £250/day contract x 230 days? is £57,500 annualised.

How likely is a £40,000 pension contribution that requires £32,000 in cash?

Might be arithmetically possible but is practically not.

This is what really, really annoys me with umbrellas. They max out positions using totally impractical and improbable assumptions just to gain an extra 1% or 2% over perceived rivals.

There's a line in a song from a favourite band of mine that sums up this situation.

From a lie that I told
That you closed your eyes and you chose to believe

For so long as individual contractors chose to believe that such high retention values are possible, they will be tempted by the advertising spin.

(The band is The Airborne Toxic Event and the song is Bride and Groom)

[Paralytic]

I would however challenge the second point. I have played around with numbers for a £25k salary and cannot get to 85%. Best I got to was a good 10% below that.

I looked back at the illustrations I got and I see now they were based on a request to max out pension payments, including previous years allowance. In that case, the retention level can actually exceed 95%.

If the pension contributions are limited to £40K in a year, and assuming a full year contract at a good day rate (eg, £500/day), I can see that 85% would be difficult to reach.

However, with a lower level of contract rate (eg, £250/day), and £40K contributed to a pension (£833/week), then isn't it still possible to achieve a 85% retention?

[webberg]

Unfortunately, large numbers of people in the UK are not financially literate (and have no interest in being so) and will trust a recommendation from a friend/colleague without doing any real validation.

The page content isn't necessarily wrong, however. Assuming you include any Salary Sacrifice payments into a pension, it is possible to "retain" 85% of your contracted day rate. It looks like that site is just an aggregator.

I would agree with your first point. People are more prepared to believe the man in the pub (or the talking head on the video call) than an expert.

In this space, I think us "experts" have done ourselves no favours because pretty much everything that was promised to be enquiry free gold has turned to virus ridden manure.

I would however challenge the second point. I have played around with numbers for a £25k salary and cannot get to 85%. Best I got to was a good 10% below that.

[Paralytic]

The morals aside for a moment.. Why on earth would anyone sign up to a literally a two page website where one of those is the data policy? Absolutely nothing there. It really beggars belief.

The answer is at the top of that page

** £250 Sign Up Bonus**

Unfortunately, large numbers of people in the UK are not financially literate (and have no interest in being so) and will trust a recommendation from a friend/colleague without doing any real validation.

The page content isn't necessarily wrong, however. Assuming you include any Salary Sacrifice payments into a pension, it is possible to "retain" 85% of your contracted day rate. It looks like that site is just an aggregator.

[dammit chloe]

The morals aside for a moment.. Why on earth would anyone sign up to a literally a two page website where one of those is the data policy? Absolutely nothing there. It really beggars belief.

There are a lot these that have exactly the same template/examples. They simply seem to be sales funnels to get people to call a number.

[northernladuk]

Just one example of the parasites Contractor Planet | Compare Contractor Deals

It takes quite a fair degree of avarice to screw those same people who are on-call and risking their lives in the event that they need to save yours.

I think we've reached rock bottom in terms of humanity, stay clear.

The morals aside for a moment.. Why on earth would anyone sign up to a literally a two page website where one of those is the data policy? Absolutely nothing there. It really beggars belief.

[Superfly]

Just one example of the parasites Contractor Planet | Compare Contractor Deals

It takes quite a fair degree of avarice to screw those same people who are on-call and risking their lives in the event that they need to save yours.

I think we've reached rock bottom in terms of humanity, stay clear.

[cojak]

Whilst I think I know who this is aimed at and I have a third party who thinks the same, I can prove no absolutely solid connection between the HMRC notice and any particular scheme.

Keep your eye on the quality press over the next day or so.

Oh no, I wasn't referring specifically to you webberg.

And I will keep an interested eye on the news...

[webberg]

Quite happy to name and shame on this thread.

Whilst I think I know who this is aimed at and I have a third party who thinks the same, I can prove no absolutely solid connection between the HMRC notice and any particular scheme.

Keep your eye on the quality press over the next day or so.

[cojak]

Quite happy to name and shame on this thread.

[regron]

Had HMRC accelerated and concentrated their efforts towards the promoters and sellers of these schemes, instead of the low hanging fruit. This and many other spotlights would not have been necessary and history tells us that there will be many NHS workers returning to work in order to help with the current global crisis, will fall for this and be in trouble further down the line.

[webberg]

Tax avoidance promoters targeting returning NHS workers (Spotlight 54) - GOV.UK

Firstly, if you are returning to the NHS, you have our thanks and admiration. Please stay safe.

Please read the above.

Credit where credit is due, HMRC has acted to the extent of their remit and issued a warning about a scheme that is not in itself new but which has apparently been targeting returning staff.

Prevention is better than cure.

If you are a returning NHS worker you need to know that the tax rules started changing in April 2017 and you may not be familiar with how these now work.

In the vast majority of instances, if you are returning to the NHS, that organisation will be obliged to tax you as an employee.

If you are on the payroll, this will happen automatically.

You may though be asked to join an "umbrella".

The majority of these will also deduct the correct amount of tax and NIC.

Some will not.

Some will promise that you will keep 75% or more of your gross payments. In order to do that, they will be using some form of tax avoidance.

HMRC knows this. If they think this is happening, they WILL make an enquiry. Chances are that they WILL be able to ask you for the tax you have avoided, especially if the scheme you used has magically sent money offshore or disappeared before it's time to pay the piper.

My firm - WTT Consulting - is happy to offer anybody who is returning to the NHS the benefit of our views on what you may be tempted by - FREE OF CHARGE.

Call us or use our info account and we will get back to you.

Please - do NOT be tempted into tax avoidance.