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

[Bowgreave]

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.

[adubya]

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.

[Bowgreave]

SIPP clarification and further assistance request

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?

[Jones]

"Does anyone know of an umbrella company that runs a salary sacrifice pension scheme and will make payments to a SIPP? "

PayStream? – Chris Dwyer said they would make employer contributions into a Hargreaves Lansdown SIPP for income over min. wage. Haven't tried them yet. Google them first.

[Glend167]

This looking interesting?

Pensions for Contractors working through an Umbrella Company

Thank you for your reply NLUK.

I will contact Contractor Umbrella Limited and ask if their Scottish Widows pension scheme includes a SIPP option.

[northernladuk]

Does anyone know of an umbrella company that runs a salary sacrifice pension scheme and will make payments to a SIPP?

Thanks

This looking interesting?

http://www.contractorumbrella.com/pension.html

[Glend167]

Umbrella company, salary sacrifice pension with payments into a SIPP?

Does anyone know of an umbrella company that runs a salary sacrifice pension scheme and will make payments to a SIPP?

Thanks

[Jones]

Umbrella Min Wage + SIPP

Working part time through an umbrella on minimum/living wage there may be no NICs to pay depending on the number of hours.

Some umbrellas won't let you pay into your own SIPP as an Employer contribution (rather than their own plan).

[malvolio]

Still need to be deducted see https://www.gov.uk/employee-reaches-state-pension-age (first google link). So that's a 14.3% deduction which won't be recoverable....

Yeah, thought that was the case. Ta.

[eek]

If he's of pensionable age (something of a variable these days!) then EeNICs won't apply.

I've never been to clear on ErNICs though - are they still due regardless?

Still need to be deducted see https://www.gov.uk/employee-reaches-state-pension-age (first google link). So that's a 14.3% deduction which won't be recoverable....

[malvolio]

If he's of pensionable age (something of a variable these days!) then EeNICs won't apply.

I've never been to clear on ErNICs though - are they still due regardless?

[eek]

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?

Well it will depend on whether you are inside or outside IR35. If outside there is nothing to worry about.

If you are inside your problem is that your company will now receive the payments after Employers NI has been deducted and Employees NI and income tax withheld. While you will be able to reclaim the income tax bit back via self assessment the NI contributions will be lost.

My FAQ has a brief overview but its likely you will lose out - I also don't think an umbrella would help you as they do need to pay you the national living wage before anything can be paid into a pension

[Bowgreave]

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?