UKC

I'm a contractor working via an Umbrella company (so I'm taxed on normal PAYE, but just employed via an intermediary). The Umbrella limits my pension contribution to 4% (+ they add 3%) but I'd like to pay more in. 

I've had a few calls with them and their set-up means I can't do it via them and I'd need to make contributions as one-off payments out of my post-tax income. 

I'm struggling to work out if I'm able to reclaim tax/NI if I were to make these payments given it would be made from post-tax income. Due to a separate (business) income source I fill in a self-assessment each year so could it possibly be done via that?

Also - I only made the 4% payments last tax year. I read something about being able to still make pension contributions within a certain number of months from the previous tax year. Given I still need to submit my self-assessment for 2020-21, does anyone know whether it's possible to make these contributions late?

Any advice would be welcomed! Thanks

As far as I recall, you can contribute up to the amount of your earned income to a pension each year. So, dividend income isn't included in that. You can also open as many pensions as you want, subject to the last few sentences. If you contribute to one of these they will normally reclaim the tax on your contribution and credit it to your pension account, so you just contribute net. I think you can make contributions to use up your previous years allowance, but I'm not too sure as these things seem to keep changing. So, basically opening another private pension and paying into that is a solution. It's also good risk management. Obviously you declare all this on your tax return. If you are earning significant amounts as a contractor it's really worth going to a chartered accountant for advice.

And you can make one-off payments to many private pension schemes, you don't have to contribute every month

What you've described is the min contributions required under the Auto Enrol workplace requirements. You will be able to make additional contributions; contact the pension provider direct, or as Wurzel said, open a private one.......

 If you have  stand alone SIPP, it will almost certainly top up your net contributions automatically to cover the 20% tax.  If you pay higher rate tax, you can either ring HMRC and tell them, or wait until you fill in an SA, which will sort it all out automatically.

The maximum amount you can put in to pensions schemes in one year is the lower of 100% of your earnings or the Annual Allowance (AA) (£40,000 for 2021/22). If from your net (taxed) income, the scheme will apply and top up your pension pot by an extra 20%. If you are a 40% taxpayer, add the details of the extra contribution to your Self Assessment Tax Return and you will get a further 20% relief.       

You can't carry back pension contributions (i.e. payment now cannot go in the 20/21 Tax Return), but you can carry forward unused Annual Allowance for three years (i.e. the amount you can contribute in 21/22 is your 21/22 AA plus any unused AA from the prior three years).

Just be aware the umbrella company will likely charge you for ‘employer’ pension contributions (as my wife found out last week).

I spy an FP or at least someone with good working knowledge!

OP, as an employee and making a personal contribution, you can claim tax back, though the 20% basic rate should get added on automatically by your pension provider (your pension provider may ask you to confirm your gross income and that you are Uk tax resident etc.) however you cannot claim back NI 

Hi James. I'd move to an umbrella company that lets you salary sacrifice. So that u can pay into the pension before NI contributions are taken. This will save u on employer and employee contributions, as well as tax, and is far more efficient than claiming back the tax after u have paid in.

I use paystream and a HL sipp. There is a small charge for the salary sacrifice, thinks it's 12 quid a week but you'll save much more.

Cheers

Thanks to IR35 there are quite a few companies (and I’ll name them if you want) who will only employ you through their own umbrella company (whether or not you are exempt). No option to move, the ‘costs’ are passed on to the consumer but all the profits remain in house. 
 

I give it a decade before we’re on par with the US in lacking employment rights.

Thanks for all the advice - I do have an accountant for my company (currently dormant) who I might get to do my self assessment anyway so I can check a few things with them and well. Good to have an idea of how to approach it all though - the advice is much appreciated. 

I’ve been through that - 25% pay cut which covered the cost of NI, pension contribution and holidays.

I actually use Paystream & their pension provider Nest. They said on the phone today that there’s no way for me to increase my contribution from 4%.

Which is annoying as well as they calculate my salary as minimum wage and then pay the rest as commission. Works out the Same in tax for everyone, but it limits what they have to contribute in terms of pension...

How does yours work with Paystream - do you use Nest or do they facilitate payment into the HL sipp?

They did try to enroll me into Nest because they have to it's a requirement now to provide a workplace pension. I opted out. I have a HL Sipp. Salary sacrifice into this.

From paystream website:

Salary sacrifice on personal pension contributions – PayStream are one of the only umbrellas that can support contributions into your personal pension plan through our salary sacrifice scheme saving you £100’s in not only PAYE but also in NI each month.

https://www.paystream.co.uk/helphub/umbrella/articles/how-to-spot-a-dodgy-u...