Q. Can agencies list only rates as Umbrella rates if the contract is inside IR35. Surely they must quote the overall rate and the contractor can choose which ever umbrella provider they like??? Most NHS jobs are listed as ‘umbrella rates’ …but not sure what that entails or has had deducted? I want to put alot of salary in a pension fund so not sure how this can be maximised if the umbrella rate is only listed.
A. Ultimately the agency or public body can decide only to engage with umbrella company contractors which may be why they are only advertising ‘umbrella rates’, but it is best to speak with the agency/public body to clarify if they will accept other umbrella companies for the role and to clarify the deductions made to come to the advertised rate.
Broadly speaking, tax relief is given to pension contributions by way of reference to relevant UK earnings. In this respect, relevant UK earnings will be income such as salary, wages, bonus, overtime, commission providing it is chargeable to tax under S. 7(2) ITEPA 2003.
You should therefore refer to your payslips to ascertain what maximum pension contributions you can make and also take the relevant professional advice.