Self employed pension question

pjw11

mania112 wrote: »

It's common.

EDIT: ... and commonly involves being self-employed and have a client who is both a friend and a business owner.

Well said! Over the years I have become very close friends with this business owner.

Thanks for all the replies, though many seem preoccupied as to my employment status. As I said previoulsy I occasionally do work for others but have got to the stage where I prefer not to, quite recently I was given the full treatment by the Inland Rev, a complete investigation going back 7 years and at no point was my employment status ever mentioned.

Alas it would seem that I will be paying tax/NI on this!

jamesd

Good to read that you survived HMRC and their sometimes rather over-assertive thoughts on who can or can't be called self-employed!

somethingcorporate

pjw11 wrote: »

Alas it would seem that I will be paying tax/NI on this!

But if you pay it into a pension you will receive the tax relief on it, negating the tax you pay on it as income.

Let's say it is £100 for the maths. You pay £20 tax and pay the £80 into a pension and 25% is automatically added back in to make it back up to £100.

Edit: more info on tax relief here: http://www.hl.co.uk/pensions/interactive-calculators/tax-relief-calculator