Salary Sacrifice in Scotland - Any difference from the rest of the UK?

kfahri342

Hi there,

I would like to understand if there are any differences between the Salary Sacrifice Arrangement for Scotland and the rest of the UK.
It is my understanding, that as Scotland has different Income Tax Bands than the rest of the UK this would result in a difference in the Salary Sacrifice Benefits being calculated.

Other than that, however, are there any other differences? It's difficult to find topics on Salary Sacrifice in Scotland, so any help would be much-appreciated.

Many Thanks

molerat

There is nothing really different. All salary sacrifice does is reduce your pay so there is less to tax.  If your pre sacrifice pay is above around £25.7K - £13118 taxable, the point where 21% kicks in - you save a bit more than in RUK.

Troxy

The real benefit for salary sacrifice in Scotland is where you sacrifice the amount when the 41% tax band kicks in (around 43,600) but also still pay the higher rate of NI (around 50k). Within those points you would have a marginal tax rate of 53% which you would no longer pay.

The mechanics of how Sal sac works is identical to how it works in the rest of the country 

Albermarle

Within those points you would have a marginal tax rate of 53% which you would no longer pay.

You have got to think that this SS loophole is going to come under more scrutiny in the current situation.

I realise it is not as simple as it looks just to stop it, but I understand the loss of employees and employers NI to the Treasury is in the many Billions and growing.

Troxy

You have got to think that this SS loophole is going to come under more scrutiny in the current situation.

I agree the government of whatever persuasion should be looking at it. It won’t be a quick decision and, if there is a decision to remove Sal sac, it will be slow to implement so make hay while the sun lasts.

kfahri342

Thank you everyone for your response. I did think this was the case its nice to have it confirmed. 

Many Thanks
Kozan