POLL - Should NI avoidance on pension contributions, via Salary Sacrifice, be stopped

MK62

Following several recent threads, and given the gloomy outlook for public finances, I thought it might be interesting to put a figure on forum member's views on this......

MK62

Should be stopped

[Deleted User] said:

From a tax policy perspective, it should be stopped. I don't care whether (i) the NIC benefit is abolished, or (ii) equivalent NIC relief is applied to all pension contributions.  

What I do care about is that the tax treatment (with the tax being NIC here) should be based on the substance of something rather than its form.

Obviously, that ignores the key issue about how much revenue will be raised / lost by any change.  But I'll leave that to others.

Given that gloomy outlook on the public finances delivered by the new PM, I think there's very little prospect (aka not a chance... ) of NIC relief being given to all pension contributions......

PS - don't forget to vote!...

GunJack

Should be left alone

Slightly off topic, but I do think NI should be simplified as a matter of course...ok have no conts payable below a minimum  threshold but flat rate on everything above it, i.e. no uel, no reduced conts above a salary level as is now. 

Sal sac is fine, leave it alone. If some employers don't offer it then that's a matter for those employers to get in board with rather than scrapping it for everyone.

MK62

Should be stopped

I suppose another point of interest would be whether those voting for "Should be left alone" are using salary sacrifice for their pension contributions (given that few people vote to make themselves worse off).......and whether those voting for "Should be stopped" are in the opposite camp.......

Albermarle

MK62 said:

I suppose another point of interest would be whether those voting for "Should be left alone" are using salary sacrifice for their pension contributions (given that few people vote to make themselves worse off).......and whether those voting for "Should be stopped" are in the opposite camp.......

Or retired after benefitting from SS.

MK62

Should be stopped

Albermarle said:

MK62 said:

I suppose another point of interest would be whether those voting for "Should be left alone" are using salary sacrifice for their pension contributions (given that few people vote to make themselves worse off).......and whether those voting for "Should be stopped" are in the opposite camp.......

Or retired after benefitting from SS.

Yes, that too........though there's then no longer any current "skin in the game"..........so to speak!

MattMattMattUK

Should be left alone

Just combine NI and income tax into a combined tax, 34%/42%/47%, apply the tax break to pension contributions. However ideally raise the combined income tax bands to 40%/45%/49%, that will raise tens of billions and even better phase out the personal allowance over the next five years.

GunJack

Should be left alone

MK62 said:

I suppose another point of interest would be whether those voting for "Should be left alone" are using salary sacrifice for their pension contributions (given that few people vote to make themselves worse off).......and whether those voting for "Should be stopped" are in the opposite camp.......

Full transparency from me - I was in civil service for first 20 years of work, been private sector on salsac since.

I don't think it's viable to just combine income tax and NI into one payment, it would need a major overhaul of not just those systems but also the benefits system too. For instance you have to somehow clock up years earned towards state pension, some benefits need X years of NI to have been paid immediately prior in order to qualify, etc. 

Marcon

What exactly is the point of this 'poll'? It'll get a tiny number of responses from a self selecting bunch of respondents, so isn't going to be useful/indicative of anything much. There are plenty of much larger research-based projects on this topic, so you can simply google if genuinely interested.

MattMattMattUK

Should be left alone

GunJack said:

MK62 said:

I suppose another point of interest would be whether those voting for "Should be left alone" are using salary sacrifice for their pension contributions (given that few people vote to make themselves worse off).......and whether those voting for "Should be stopped" are in the opposite camp.......

Full transparency from me - I was in civil service for first 20 years of work, been private sector on salsac since.

I don't think it's viable to just combine income tax and NI into one payment, it would need a major overhaul of not just those systems but also the benefits system too. For instance you have to somehow clock up years earned towards state pension, some benefits need X years of NI to have been paid immediately prior in order to qualify, etc. 

Easy enough, a simple system where one has to have paid £X or more in tax in a year to earn credit for that year's state pension or paid £Y or more per month in tax for the benefits component.

GunJack

Should be left alone

Whilst I'm all for simplicity, that would appear to be TOO simplistic...