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Pension for self employed

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I'm helping to set up a pension for my brother in law, who is self employed.  He works for a firm but isn't directly employed, however they pay tax monthly on his behalf.  Having never been self employed myself this sounds like a strange arrangement, as I thought tax would be paid via self assessment at year end.  But that's what he tells me.  Anyone recognise this set up?

I think a SIPP is his best, and possibly only option.  Into which he can pay taxed income and receive the 20% uplift from HMRC.

As he's not interested in making investment decisions, it would need to be managed by the provider.  Vanguard retirement funds look decent, as they have a range of fund options with asset allocation driven by expected retirement age and lowish fees (although I've yet to compare against other providers).

Any input appreciated, especially on his self employment status.

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Frank Hovis

The only case I've come across where this happens is in construction where firms have to deduct tax / NI from subcontractors and pay it to the Revenue.

The subcontractor then offsets against their tax due.

It was brought it as subcontractors would often not declare their earnings. The classic example cited is Irish labourers in the 1970s giving their name as M Mouse.



I moved to Vanguard last year because of the huge fee saving over HL; Vanguard are more limited in what you can hold but that's fine for me these days.

A relative by marriage has put everything above £12.5k into a SIPP for years and is talking about retiring before fifty; though he did inherit a house.

It's a good way to grow investments tax free plus the initial tax saving.

The downside to the SIPP is the way that taking it out is restricted but it's no worse than, and probably better than, most pensions on that score.

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Useful link @Frank Hovis, thanks.  The sub contractor set up makes sense since his job is loosely construction related. Probably more on the civil engineering side, which is covered under CIS per the link. 

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