Umbrella Pension Salary Sacrifice of One-off Bonus Payments

[foxyy]

I've not left myself enough time to find an alternative umbrella, but it's something I will consider for any new contract.

Assuming there are any reputable umbrellas out there which support this and don't charge too much in fees etc.

If anyone hears of any umbrellas offering this and would recommend them, it would be good if they can share this?

Thanks

[Paralytic]

The sacrifice of an unexpected, adhoc bonus payment towards a personal pension is different to changes to the underlying regular pay salary sacrifice arrangement. That regular arrangement can only usually be varied in line with the life events mentioned or new tax year etc.

HMRC does allow separate treatment for bonus payments like this.

The above is my understanding anyway after seeking some independent tax advice on the matter.

The practical issue is finding or persuading umbrella's to facilitate these kind of legitimate adhoc, additional salary sacrifices.

This is my experience from the last time i had a perm role - i paid a regular salary sacrifice pension payment, and could also contribute a lump-sum (again salary sacraficed) from the annual bonus. So, legally, this is very much allowable, the challenge is finding an Umbrella willing to accomodate it.

If I were the OP, if time allowed before the bonus is paid, I'd be phoning around other Umbrellas (perhaps checking which ones the agency would allow, if applicable) and then resigning from the current Umbrella and moving over.

foxyy, have you contacted any other Umbrellas already?

[eek]

The sacrifice of an unexpected, adhoc bonus payment towards a personal pension is different to changes to the underlying regular pay salary sacrifice arrangement. That regular arrangement can only usually be varied in line with the life events mentioned or new tax year etc.

HMRC does allow separate treatment for bonus payments like this.

The above is my understanding anyway after seeking some independent tax advice on the matter.

The practical issue is finding or persuading umbrella's to facilitate these kind of legitimate adhoc, additional salary sacrifices.

Oh you are completely right there on both points.

The problem is that umbrella's aren't used to adhoc bonus payments - because it's a very unlikely thing to occur.

[foxyy]

The sacrifice of an unexpected, adhoc bonus payment towards a personal pension is different to changes to the underlying regular pay salary sacrifice arrangement. That regular arrangement can only usually be varied in line with the life events mentioned or new tax year etc.

HMRC does allow separate treatment for bonus payments like this.

The above is my understanding anyway after seeking some independent tax advice on the matter.

The practical issue is finding or persuading umbrella's to facilitate these kind of legitimate adhoc, additional salary sacrifices.

[eek]

I thought this might be the case, but was wondering/hoping if there might be other umbrella options. Possibly for future contracts.

Thanks for your thoughts on this.

We aren't saying there aren't other options but I can't think of many.

Pension rules are actually quite complex because the Government doesn't want people changing them all the time so changes should be being made annual or on life change events (such as children, divorce or your partner losing work).

[foxyy]

I thought this might be the case, but was wondering/hoping if there might be other umbrella options. Possibly for future contracts.

Thanks for your thoughts on this.

[eek]

It is a one off (annual) client bonus which was paid to permanent employees and extended to inside IR35 contractors. This will be paid via the umbrella. Although their initial response is that it cannot be used for extra pension salary sacrifice as they don't facilitate this.

So as a guessed and the issue you currently have is also one I would have guessed.

I'm not sure what the fix is as you clearly need a more personalised rather than mass market umbrella for this type of one off task (additional pension payments are tiresome).

As both NLUK and myself have already pointed out speak to Lucy at Clarity. I'll be chatting with her tomorrow anyway.

[foxyy]

It is a one off (annual) client bonus which was paid to permanent employees and extended to inside IR35 contractors. This will be paid via the umbrella. Although their initial response is that it cannot be used for extra pension salary sacrifice as they don't facilitate this.

[eek]

You've got to be VERY careful with your wording here. Bonus from an umbrella is right in schemes territory and you want to avoid it like the plauge. It's a tax wheeze that's gone wrong. WSwee the HMRC Scheme Enquires section to see the fall out from bonsus. Avoid like the plague.

Now BENEFITS is a completely different thing. Yes all umbrellas do pensions as it's law. Whether they put in to your SIPP or their own then you'll have to do the legwork and investigate. They are all different.

So get what you want right. One off BONUS payments? Avoid like the plague. Umbrellas with BENEFITS packages including pension payments, yes, but not one offs.

Umbrellas don't offer a full employment thing like your employer would so it's always going to be a bit cut down compared to what perms get so don't expect too much when you are looking for great perks and 'above and beyond' packages from brollys.

If you want to know exactly what a good brolly can provide then ring Lucy at Clarity Umbrella. They have the best offering at the moment and I'm sure she'll be happy to chat about what is and isn't allowed so you can avoid the schemes.

Um I think you are reading it very differently from the way I am.

I read it as a bonus payment from the client to foxyy being paid via the umbrella... In which case everything is above board and the question makes complete sense.

Clarity should be able to handle such things but you will find that a lot of umbrellas are completely not set up for this type of ad-hoc transaction.

[Paralytic]

Does anyone know if there are any umbrella companies which facilitate additional pension salary sacrifice contributions for any one-off bonus payments received?

Who is paying this bonus to the Umbrella company?

[northernladuk]

You've got to be VERY careful with your wording here. Bonus from an umbrella is right in schemes territory and you want to avoid it like the plauge. It's a tax wheeze that's gone wrong. WSwee the HMRC Scheme Enquires section to see the fall out from bonsus. Avoid like the plague.

Now BENEFITS is a completely different thing. Yes all umbrellas do pensions as it's law. Whether they put in to your SIPP or their own then you'll have to do the legwork and investigate. They are all different.

So get what you want right. One off BONUS payments? Avoid like the plague. Umbrellas with BENEFITS packages including pension payments, yes, but not one offs.

Umbrellas don't offer a full employment thing like your employer would so it's always going to be a bit cut down compared to what perms get so don't expect too much when you are looking for great perks and 'above and beyond' packages from brollys.

If you want to know exactly what a good brolly can provide then ring Lucy at Clarity Umbrella. They have the best offering at the moment and I'm sure she'll be happy to chat about what is and isn't allowed so you can avoid the schemes.

[foxyy]

Does anyone know if there are any umbrella companies which facilitate additional pension salary sacrifice contributions for any one-off bonus payments received?

I'm meaning separate and in addition to any normal agreement set up at the start for any £x per day to be deducted and contributed towards a personal pension.

I know lots of non-umbrella employers do support extra bonus pension salary sacrifice arrangements often with flexibility over the amount that can be sacrificed.

Wondering if any umbrella's operate with similar flexibility?

Thanks