"Over 90% of employers think that the chancellor will place restrictions on pensions salary sacrifice schemes at the upcoming Autumn Budget, according to a new survey of mid-market businesses. Conducted by Censuswide for BDO, the survey found that almost half (49%) of C-suite respondents believe restrictions are 'quite likely' while 45% consider them 'very likely'. Only 6% see an equal chance either way, while less than one per cent think restrictions are unlikely."
"In salary sacrifice schemes, employees forgo part of their salary which the employer pays instead into their pension as an enhanced pension contribution. This arrangement offers NIC savings for both employer and employee, as the sacrificed salary and employer contributions are exempt from both income tax and NIC. HMRC's study examined three scenarios: Scenario one removed the NIC exemption, resulting in employer and employee NIC charges on the salary that the employee sacrificed."
Over 90% of mid-market employers expect the chancellor to place restrictions on pension salary sacrifice schemes in the upcoming Autumn Budget, with 49% viewing restrictions as quite likely and 45% as very likely. Only 6% see an equal chance and under 1% see restrictions as unlikely. Salary sacrifice allows employees to forgo salary so employers pay enhanced pension contributions, creating NIC and income tax exemptions that save contributions for both parties. HMRC modelled three reform scenarios removing NIC and/or income tax exemptions, including a threshold option, with employers warning all scenarios could harm morale while favouring a threshold for perceived fairness.
Read at London Business News | Londonlovesbusiness.com
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