I’m self employed but work on projects for companies for several months at a time. Once I earn £10,000 from a company I’m auto-enrolled into their workplace pension scheme. So once they’ve taken off my pension contribution the amount I’m paid is less than I have invoiced for. This means that when I mark them as paid to my bank account there is obviously a discrepancy between the invoice amount and the amount paid.
What would be the best way of dealing with this on the system?
Not sure I follow, as far as I know, auto enrolment is for employees, not self employed individuals who invoice for work.
Because it sounds like the op is technically self employed but is caught by Ir35 and is most likely operating through an umbrella company. The umbrella company will put the op in to an automatic enrollment pension once they go over 10k.
Op if you don’t want to have your invoiced amount to be greater than what you receive you have two choices.
Increase your charge to cover the cost of the pension or simply opt out from it.
Other than that, what you have to do is create a seperate bank account in qf, log a payment in for the invoice amount and mark it paid, then log a money out for the pension and the balance left as a transfer to your main back account matching the money received.
If this is an ir35 issue, then the amount you receive I’d have thought would also be less tax and ni, not just pension.
Thanks for the responses. To clarify I am classed as a self employed/sole trader for tax purposes but become eligible for a company’s, that I am temporarily working for, auto-enrolled pension scheme once they’ve paid me £10,000. Although I can opt out I often get the paperwork well after the deductions have been made and there is the advantage that the company also contributes.
I think though your suggestion re bank accounts is a great idea and will solve my issue, so thanks for that much appreciated.
For anyone interested in -
Employers are obliged to have a minimum level pension scheme in place for workers aged 22 and over who earn more than £10,000 per year under the auto-enrolment rules.
‘Worker’ is a legal term rather than a tax term. Workers are generally employees, but sometimes you can be self-employed for tax purposes but still be classed as a worker for employment law purposes.
It is workers that are assessed for auto-enrolment, not employees.
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