Worried I'm not doing enough, or the right thing!

tony4147

Crystal_Ball wrote: »

Tony, do you mind me asking which umbrella you use?
I'm also using an umbrella co (NASA Consulting).

I'm using Parasol Group in Warrington, been with them now for over 5 years, find them very good, the only thing is it is their pension scheme with Scottish Widows that you have to use for salary sacrifice.

Jack_Griffin

tony4147 wrote: »

I'm also a Contractor and I don't have a LTD Company (IR35), I work through an Umbrella Company, mainly as it's easy. I'm also a higher rate tax payer.
The Umbrella I use have a group pension scheme with Scottish Widows and I pay into it by salary sacrifice, basically my pension contributions are paid into the scheme and I pay tax and NI on whats left. For every £100 paid into the pension it only costs me something like £54/56, so yes it's free money.

I went LTD company (not IR35), so for example, next year.

Pay yourself up to tax allowance (probably NI £450 for 1 year)

Then you pay corporation tax @20% for small company. But whatever you put into a pension is not counted as profit.

£70,000 turnover, 9.5K salary, 16K dividend taxed at 20%, = 3.7K tax/NI, a liveable income of £22+K, less accountants fees/other expenses.

The rest can go into pension fund, say a max of £40K, it soon mounts up.

OFC there are other ways of splitting the income & I actually put a larger% into dividends & then to cash savings/investments.