Hopeful return to the fold

[TheFaQQer]

Huh ? I don't have an employer yet. This is one of the questions I've been firing at brollies. Some are happy to pay into my SIPP from gross, others are not.

I shall use a brolly that is prepared to do it, but check it's OK with HMRC first.

This thread relates to SIPP contribs made by a contractors Ltd, but the same rules should appy to brollies. If they don't someone please explain why
http://forums.contractoruk.com/accou...d-company.html

Sorry, I took it from your post number 3 that you only had one umbrella who would consider this. If you've only got one option, then discussing things with HMRC seems a moot point - they may provide absolutely clear guidance that it's OK, but if you can't find an umbrella who will do it then it makes no difference.

[malvolio]

This thread relates to SIPP contribs made by a contractors Ltd, but the same rules should appy to brollies. If they don't someone please explain why
http://forums.contractoruk.com/accou...d-company.html

Why do you think they should? They are completely different scenarios; you are an employee of the umbrella, not a shareholding director of it.

[LisaContractorUmbrella]

WMS umbrella companies offer pension schemes to their employees and the employees are entitled to tax relief on the contributions - this does not apply if they were to make contributions to a personal scheme

[Nixon Williams]

Even if your contract is caught by IR35 (I assume that you have had it checked?) it is still financially beneficial to operate through a limited company, even though the savings are reduced.

If you wish to make SIPP contributions then certainly operating through a limited company can make a great deal of sense.

[CoolCat]

I pulled out of a brolly pension agreement. My basic problem was they were paying the pension in preference to expenses. I was running mega (legit) expenses (don’t ask, and not all the time) and to find they had not been completely covered but the pension payment had gone through was the exact reverse of what I was expecting (and what I had been told when I signed up for it). I would have had no probs with the pension catching up later. The risk of ending a contract, and possibly the engagement with that brolly, while still having significant expenses outstanding was too much. And being expenses I wanted the money to cover the corresponding credit card bills etc.

The other thing I was not very happy about was needing to choose a fixed amount each month, when earnings were so variable. I would have been much happier with a percentage of pay or invoices.

So I ended up just writing a cheque monthly to a personal pension. Sure I took a hit on the national insurance, but it was the only way I could control it.

[LisaContractorUmbrella]

I pulled out of a brolly pension agreement. My basic problem was they were paying the pension in preference to expenses. I was running mega (legit) expenses (don’t ask, and not all the time) and to find they had not been completely covered but the pension payment had gone through was the exact reverse of what I was expecting (and what I had been told when I signed up for it). I would have had no probs with the pension catching up later. The risk of ending a contract, and possibly the engagement with that brolly, while still having significant expenses outstanding was too much. And being expenses I wanted the money to cover the corresponding credit card bills etc.

The other thing I was not very happy about was needing to choose a fixed amount each month, when earnings were so variable. I would have been much happier with a percentage of pay or invoices.

So I ended up just writing a cheque monthly to a personal pension. Sure I took a hit on the national insurance, but it was the only way I could control it.

I assume that your pension and expenses would have pushed your taxable earnings below minimum wage; if this was the case then the umbrella company couldn't do anything other than not process your expense claims if you had signed up to monthly pension contributions.

[CoolCat]

I assume that your pension and expenses would have pushed your taxable earnings below minimum wage; if this was the case then the umbrella company couldn't do anything other than not process your expense claims if you had signed up to monthly pension contributions.

No they paid the hours worked x minimum wage 1st (and a % towards holiday pay), then pension, then expenses, then rest is bonus effectively. As I said the biggest problem for me was at times where expenses would be covered but only if paid before the pension.

[LisaContractorUmbrella]

No they paid the hours worked x minimum wage 1st (and a % towards holiday pay), then pension, then expenses, then rest is bonus effectively. As I said the biggest problem for me was at times where expenses would be covered but only if paid before the pension.

That's the point I'm trying to make - pension contributions and expenses will reduce your taxable income - if the application of both takes that income below minimum wage then the umbrella company would be contravening the minimum wage legislation and therefore would only process pension contributions and whatever level of expenses would not represent a contravention

[CoolCat]

That's the point I'm trying to make - pension contributions and expenses will reduce your taxable income - if the application of both takes that income below minimum wage then the umbrella company would be contravening the minimum wage legislation and therefore would only process pension contributions and whatever level of expenses would not represent a contravention

yes they applied a precedence to payments, as above. so that minimum wage always got paid 1st. and in event money available didnt cover all outstanding expenses or pension due they would just carry over amount owed into next payroll run. no problem with any of that. what i did object to was pension being kept up to date while expenses were allowed to build a big backlog of unpaid amounts. happened that way as i worked a lot some months and hardly any other months and so on. the whole point of an umbrella for me is getting the expenses out tax free quickly and easily, when they were doing this it just destroyed the whole point of the thing.

[LisaContractorUmbrella]

yes they applied a precedence to payments, as above. so that minimum wage always got paid 1st. and in event money available didnt cover all outstanding expenses or pension due they would just carry over amount owed into next payroll run. no problem with any of that. what i did object to was pension being kept up to date while expenses were allowed to build a big backlog of unpaid amounts. happened that way as i worked a lot some months and hardly any other months and so on. the whole point of an umbrella for me is getting the expenses out tax free quickly and easily, when they were doing this it just destroyed the whole point of the thing.

But you had signed up to the pension scheme and presumably had agreed a monthly contribution to it which the umbrella company would have been bound to make - there really isn't anything else they could have done unless you decided to cancel your pension contributions.