Inside IR35 Contract and child maintenance

[itjoe]

Hello all,

I am new to these forums and new to inside IR35 world of contracting. I was hoping to have some guidance from people out here

I know with the nature of my request, I'm bound to be misunderstood and might get a bit of a roasting. But a very kind judge in my extremely messy divorce, thought it was very fair to hand over 100% of the assets to my ex-wife (including 2 properties). Leaving me at the age of 52 in a 1-bed rental apartment and about 20k in pension. So I appreciate there might be some judgement being thrown in my direction, but I'm only just looking to rebuild my life and lookout for myself during retirement.

I've been offered an IT contract for £475 per day and I'm trying to maximise as much saving as I can, as the contract only lasts a year.
I understand that I can contribute 40k in pension per year.

My biggest concern however is with the child maintenance calculations, I understand that this is calculated from the gross income and my confusion is in coming to a gross annual figure to calculate the child maintenance I'm liable for. Of course, I would like this to be as low as legally possible but also don't want to be caught out if CMS do plan on challenging that. My ex still thinks I'm very well off for some reason. Out of interest, does anyone know how CMS can check my income in a contract role? The couple of umbrella companies I spoke to say they don't produce salary statements, so I'm a bit unsure.

My second concern is with the holiday pay. I would be very grateful if someone can explain how holidays are managed? In a permanent role, the leave is outside of pay. Where as in a contracting role, I don't get paid for the days I take off (or sick). I was hoping to put aside around 2.5 days worth of income in a pot (preferably held by the umbrella company), preferably pre-tax and then use that when I come to take leave. I just don't want to be caught out with less income when I do take a couple of weeks off. Also, I'm afraid having a higher income during the other months will skew the CMS figure towards the higher side.

One of the umbrella companies gave me this illustration:
475 days * 48 weeks * 5 days per week = £114,000
Pension contribution per year = -£40,000

Annual turnover (after pension) = £74,000
Gross income (after apprenticeship levy, margin etc) = £64,612

This works out to a gross figure of £5,384.33 per month. This however, excludes any holiday or sick pay.

Can anyone please advise? I'll be very grateful for any help I can get. Also suggestions to a good umbrella company will be very much appreciated

Many thanks for reading this and for any help you can offer

[eek]

This is (I Think) the last post on umbrella companies and child maintenance

https://forums.contractoruk.com/acco...mpanies-2.html sorry but it's not great reading for you

Regarding holidays, umbrella firms can keep holiday pay and pay it when you take time off - whatever you do though do take the time off and claim it.

As for you last question Clarity umbrella and Orca would be the recommended ones.

[itjoe]

Wow, thanks for the info eek. I wish the OP in the thread you referenced posted back with his experience. So how do you suggest I proceed with this? Does this mean I'm liable on the full £114,000? Which of course doesn't allow for any expenses or days off (holidays or sick days). Or after pension contributions, in which case it will drop down to £74,000.

I'm seriously considering relocating to another country, with my experience the judicial system in the UK makes little sense, they seem to be more politically correct now and are very much prepared to throw the guy under the bus.

Thank you for also the suggestions about the umbrella companies, I hope they will have some experience related to this too

[lucyclarityumbrella]

I think this would be down to how it was presented esp on the payslip, this should only ever carry the taxable salary of which the CSA payment should be based, the whole contract rate is not available to the contractor so should not be taken into consideration. The previosu thread does make for bad reading, but it does make me wonder how it was explained in the first place to them.

[TOSH1]

I am/will be in a similar situation to ITJOE.

I have been contracting with a LTD company for the 12 years and my company was earning £500 per day for most of the period.

I split with my ex 5 years ago and I do pay her a weekly amount of £100 per week. Someone mentioned that I my company earns £2500 per week and now she wants to know why I am 'only' giving her £100 per week as she believes she is intitled to half of the £2500 per week that I used to earn prior to April 2021.

She has no understanding or cares about IR35 and is just seeing £££££. She has contacted CSA and I will be going to court soon, even though the children stay with me 4 nights a week.

I have been offered a contract paying £500 per day but this time in an umbrella, but the company is 150 miles away and i know that I will not be able to claim expenses/ hotel fees. Just thinking it over before I commit to it.

[eek]

I wouldn’t be taking an inside IR35 contract if you have expenses as the CSA really won’t see or care about that - they will just look at the top line figure (which at best is the PAYE figure - say £400 a day before you paid the expenses)

[eek]

Hello, I have a related question. First of all the pension allowance has gone up to 60k, I understand, so that's a good thing. However since I havent paid anything into my pension for a few years I understand I can pay into pension the full pension allowance for the previous 3 years as well. So does that mean I could theoretically pay in 60k for this year and then 40k for eachnof the last 3 years, ie pay up to 180k into my pension this year and then draw a take home salary of say 40k and have the cms calculation based on the 40k? I ask because I have no pension whatsoever and if I go for an inside ir35 role I'd like to bootstrap my pension without getting punitive cms calculations. Anybody know if this is OK with the cms people?

You can only backdate your pension if you already had 1 set up. So unless you have something sorted all you can put in is this years allowance of £60,00.

but get some proper advice..,

[Protagoras]

Hello, I have a related question. First of all the pension allowance has gone up to 60k, I understand, so that's a good thing. However since I havent paid anything into my pension for a few years I understand I can pay into pension the full pension allowance for the previous 3 years as well.

Example online carry-forward calculator
https://www.hl.co.uk/pensions/contri...nce-calculator

but get some proper advice ...