Stakeholder salary sacrifice not paying NI

GibbsRule_No3.

From March next year I won’t be paying NI. I will be SP age. At present I am in a SS stakeholder pension scheme and will continue to work three days a week, while I understand that my payment into the scheme benefits me tax wise, what benefit is there for the company after March? I am thinking of asking to pay in more to the scheme so I get more tax and scheme benefit but if no NI is being paid wonder what the company benefit is? I will ask the company if I need to up the payment before I reach SP, in case payment in place is honoured but payment after SP age is not accepted into the scheme. I have been told that some of my already retired colleagues are paying almost all of their salary into the scheme and are using their SP and previous CS pension to comply with the Living Wage element.

molerat

Employer's NI is still payable so they carry on making their saving.

GibbsRule_No3.

How interesting, do you know why? Is it to do with things like death in service and sick pay, so they get financial help towards something from an outside source? Is the only reason I don’t have to pay it because the SP is in play? When people ask why they have to keep paying NI even after attaining the years required to get SP years (30, 35?) but not have reached SP age the answer is that it also pays towards hospitals etc.

Sibbers123

GibbsRule_No3. wrote: »

How interesting, do you know why? Is it to do with things like death in service and sick pay, so they get financial help towards something from an outside source? Is the only reason I don’t have to pay it because the SP is in play? When people ask why they have to keep paying NI even after attaining the years required to get SP years (30, 35?) but not have reached SP age the answer is that it also pays towards hospitals etc.

Tax isn't very logical, that's why! The same could be said that earned income (employment, self-employment etc.) you will pay NIC and on unearned income (rental income, dividends and interest) you won't pay NIC - you essentially pay less tax for doing nothing. My logic would say it should be the other way around!

Albermarle

When people ask why they have to keep paying NI even after attaining the years required to get SP years (30, 35?) but not have reached SP age the answer is that it also pays towards hospitals etc.

Because NI is just income tax by another name and you keep paying that until you die , ( if you have enough income )

Brynsam

GibbsRule_No3. wrote: »

How interesting, do you know why?

Because NI is basically a tax on employment.