Losing access to salary sacrifice

MK62

Albermarle wrote: »

Perhaps by saying it was a loophole , I was not fully considering the bigger picture , that is well explained above .
However if we look at the employer rather than the employee. Then to use a personal example , I work for a very large company , with a mega rich owner(s), living as tax exiles. . When we moved to salsac, they kept all the employer savings on NI to themselves . So immediately HMRC was deprived of revenue which went straight to help buy the next luxury yacht . That sounds like a loophole to me.

I appreciate your point, but once your pension arrangement moved to salsac, HMRC was deprived of that NI revenue regardless of whether the company or the employee got it (or both, if it was shared).
It is annoying though when you see the system "side-stepped" in this way......personally I would stop salsac on pensions completely, and I'd be having a very close look at all the other salsac schemes too.

Lakeuk

Salary sacrifice is endorsed by the government to persuade workers to take action with an incentive, mainly in saving into a workplace pension, or trying to get fit with a cycle to work scheme.

ffacoffipawb

MK62 wrote: »

I appreciate your point, but once your pension arrangement moved to salsac, HMRC was deprived of that NI revenue regardless of whether the company or the employee got it (or both, if it was shared).
It is annoying though when you see the system "side-stepped" in this way......personally I would stop salsac on pensions completely, and I'd be having a very close look at all the other salsac schemes too.

In that case, ALL employer contributions should be subject to NI paid by the employee. That's a whole can of worms.

MK62

ffacoffipawb wrote: »

In that case, ALL employer contributions should be subject to NI paid by the employee. That's a whole can of worms.

Why?
Plenty of non-salsac schemes exist, and none of those make the employee pay NI on any employer contributions, let alone all.

However, the employer's NI avoidance from salsac is only half the story - the other is the employee's NI avoidance.....the reason salsac exists is to avoid NI.

Taxation (in whatever form) has to not only be, as far as practically possible, fair to everyone, it also has to be seen to be fair everyone.......those with access to salsac on their pension, would, unsurprisingly, not be keen to give that up, but they are getting a perk which is not available to everyone.
It is, in effect, a benefit-in-kind, and should, at least imho, be treated as such.
Fair enough, you'd have to work out the details of exactly how to do it, but HMRC aren't usually short of finding ways to do this kind of thing.......

The extra money raised from abandoning such schemes (or equalising the NI treatment), could be used, for example, to fund a higher Personal Allowance for everyone - something all taxpayers could benefit from.......or a cut in VAT once (if) we leave the EU.....and so on.

Still, I suspect the government's attention is on other things at the moment....;)