Employers NI raise confirmed by BBC?

Grumpy_chap

LHW99 said:

masonic said:

boingy said:

Rather brilliantly the latest version is that "working people will not see any tax rises on their pay slips". It's turning into a sitcom. 

Oh dear. My payslips include a line for Employer NI. I don't think this is unusual.

So you don't wok if you're self employed?

You don't need to be self employed to see employers NI on pay slips.

One assumes an increase in employER NI will also be accompanied in the sole trader rates increasing.  Do sole traders have payslips?  If they don't, then they can't see a change.

Albermarle

Grumpy_chap said:

hallmark said:

I wonder if part of the agenda here is to curb wage inflation.  A 2% increase on employers NI will likely mean a percentage or so off of wage increases.  That would be very welcome to the Govt

Given the public sector wage settlements agreed by the current Government, curbing wage inflation would not appear to be a current priority.

Presume the priority is more about stopping  strikes / filling all the vacancies / staff retention problems in critical public sector occupations.
50,000 nurse vacancies for example.
Even the apparently highly paid train driving jobs are not exactly overwhelmed with applications and having to drop the minimum age to 18.
In the end the law of supply and demand is in charge.

Altior

Albermarle said:

Grumpy_chap said:

hallmark said:

I wonder if part of the agenda here is to curb wage inflation.  A 2% increase on employers NI will likely mean a percentage or so off of wage increases.  That would be very welcome to the Govt

Given the public sector wage settlements agreed by the current Government, curbing wage inflation would not appear to be a current priority.

Presume the priority is more about stopping  strikes / filling all the vacancies / staff retention problems in critical public sector occupations.
50,000 nurse vacancies for example.
Even the apparently highly paid train driving jobs are not exactly overwhelmed with applications and having to drop the minimum age to 18.
In the end the law of supply and demand is in charge.

Genuine question, where is the 50K nurse vacancy number sourced? 

In an organisation with the headcount of the NHS, there will always be vacancies. Thousands of leavers and joiners every month I should imagine. It would also be useful to know if the level of vacancies has recently increased, decreased or remained pretty consistent. 

For what it's worth, I searched the NHS vacancy website using the job title 'nurse', and it threw up '7,781 jobs found for nurse'. 

Altior

Took a quick look at the alleged abundance of trainee train diver vacancies, as that sounds surprising too. I heard it's a pretty tough field to enter into, but not actually checked for myself. Did find this in ad for Trainee Train Driver Northern Trains:

After submitting your application, please note that you may not receive an update for 8-12 weeks. This is due to the large volume of applications and our thorough screening process. During this time, applications will be carefully reviewed, and only those meeting the necessary criteria will proceed to the next stage. We kindly request that you refrain from contacting us for updates before the 12-week period has passed, as we will not be able to provide any information other than that your application is being processed.

If you pass the initial screening, you will be invited to a telephone interview. Successful candidates from this stage will then attend an in-person interview, followed by psychometric testing. If you pass the final interview and psychometric test, a conditional offer will be made, subject to available training course placements and passing required medical tests.

• Due to the high volume of applications, we receive, anyone that re-applies for a traincrew position within a 1-year timeframe will be automatically rejected.

Doesn't sound like there's a particular dearth of applicants...

hallmark

It's interesting that this thread has survived a few days (perhaps because it's over a weekend I don't know).  But it's remained civil, engaging, and on the whole the vibe is congeniality.

We don't need safe spaces, we need to chat and sometimes disagree but keep it civil, polite, and maybe friendly. How else does anybody learn anything. Or question stuff they thought they already "knew".

This take on things didn't used to be controversial.

intalex

Dazed_and_C0nfused said:

If done correctly I think salary sacrifice can still be used for auto enrolment schemes.

Despite not attracting any pension tax relief salary sacrifice is, for all but very low earners, the most tax/NI efficient way of contributing.

I believe some employers mandate a minimum % of salary sacrifice to cover the minimum employer + employee contributions (usually baked into a flexible allowance in the pay packet), so it's not always left to the employee to fully comply.

Not sure I understand what you mean by "despite not attracting any pension tax relief" - isn't there an implied relief at the marginal rate? In other words, if hypothetically speaking tax relief was flattened to 30% wouldn't those making discretionary contributions via salary sacrifice be assessed for the implied marginal relief vs 30% and the difference applied to their self-assessment?

Dazed_and_C0nfused

intalex said:

Dazed_and_C0nfused said:

If done correctly I think salary sacrifice can still be used for auto enrolment schemes.

Despite not attracting any pension tax relief salary sacrifice is, for all but very low earners, the most tax/NI efficient way of contributing.

I believe some employers mandate a minimum % of salary sacrifice to cover the minimum employer + employee contributions (usually baked into a flexible allowance in the pay packet), so it's not always left to the employee to fully comply.

Not sure I understand what you mean by "despite not attracting any pension tax relief" - isn't there an implied relief at the marginal rate? In other words, if hypothetically speaking tax relief was flattened to 30% wouldn't those making discretionary contributions via salary sacrifice be assessed for the implied marginal relief vs 30% and the difference applied to their self-assessment?

If you make a relief at source contribution then the pension company adds 25% to that, which requested to 20% of the gross contribution (so basic rate relief).  So £100 you add becomes £125 in the pension.

If you sacrifice salary you are getting some employer contributions in return and there is no pension tax relief added to those.  So £100 sacrificed becomes £100 in the pension.

But you have £100 less income to be taxed on and pay NI on.  For most people this means you avoid paying 20% tax and 8% NI or 40% tax and 2% NI although if you have a very low income you might not save anything.

Other than from an annual allowance perspective salary sacrifice is never a factor for Self Assessment as you cannot include employer contributions in the pension contributions section of your return.

intalex

Dazed_and_C0nfused said:

If you make a relief at source contribution then the pension company adds 25% to that, which requested to 20% of the gross contribution (so basic rate relief).  So £100 you add becomes £125 in the pension.

If you sacrifice salary you are getting some employer contributions in return and there is no pension tax relief added to those.  So £100 sacrificed becomes £100 in the pension.

But you have £100 less income to be taxed on and pay NI on.  For most people this means you avoid paying 20% tax and 8% NI or 40% tax and 2% NI although if you have a very low income you might not save anything.

Other than from an annual allowance perspective salary sacrifice is never a factor for Self Assessment as you cannot include employer contributions in the pension contributions section of your return.

But if hypothetically they were to flatten the tax relief to 30%, anyone sacrificing enough salary to get their adjusted net income under £50k / £100k / £125k in order to respectively avoid the higher rate / 60% / additional rate bands, will surely have to start declaring their total salary sacrifice on their self-assessment to calculate and pay the difference between 30% tax relief and the 40% / 60% / 45% relief-like benefit they would have already received in their pension pots?

zagfles

intalex said:

Dazed_and_C0nfused said:

If you make a relief at source contribution then the pension company adds 25% to that, which requested to 20% of the gross contribution (so basic rate relief).  So £100 you add becomes £125 in the pension.

If you sacrifice salary you are getting some employer contributions in return and there is no pension tax relief added to those.  So £100 sacrificed becomes £100 in the pension.

But you have £100 less income to be taxed on and pay NI on.  For most people this means you avoid paying 20% tax and 8% NI or 40% tax and 2% NI although if you have a very low income you might not save anything.

Other than from an annual allowance perspective salary sacrifice is never a factor for Self Assessment as you cannot include employer contributions in the pension contributions section of your return.

But if hypothetically they were to flatten the tax relief to 30%, anyone sacrificing enough salary to get their adjusted net income under £50k / £100k / £125k in order to respectively avoid the higher rate / 60% / additional rate bands, will surely have to start declaring their total salary sacrifice on their self-assessment to calculate and pay the difference between 30% tax relief and the 40% / 60% / 45% relief-like benefit they would have already received in their pension pots?

Depends how it's done. Been discussed loads on the pensions board

Albermarle

Altior said:

Albermarle said:

Grumpy_chap said:

hallmark said:

I wonder if part of the agenda here is to curb wage inflation.  A 2% increase on employers NI will likely mean a percentage or so off of wage increases.  That would be very welcome to the Govt

Given the public sector wage settlements agreed by the current Government, curbing wage inflation would not appear to be a current priority.

Presume the priority is more about stopping  strikes / filling all the vacancies / staff retention problems in critical public sector occupations.
50,000 nurse vacancies for example.
Even the apparently highly paid train driving jobs are not exactly overwhelmed with applications and having to drop the minimum age to 18.
In the end the law of supply and demand is in charge.

Genuine question, where is the 50K nurse vacancy number sourced? 

In an organisation with the headcount of the NHS, there will always be vacancies. Thousands of leavers and joiners every month I should imagine. It would also be useful to know if the level of vacancies has recently increased, decreased or remained pretty consistent. 

For what it's worth, I searched the NHS vacancy website using the job title 'nurse', and it threw up '7,781 jobs found for nurse'. 

This website gives a figure of 43,300 at the end of 2022, with an extra concern over the rate of people leaving the profession
Retaining NHS nurses: what do trends in staff turnover tell us? - The Health Foundation
Other sites indicate some small improvement in the meantime.
The site says the NHS has a target vacancy rate for nurses of 5%.
This site says currently it is nearly 12 %
Stats And Facts On The UK's Nursing Workforce 2024
So a gap of 7% on total number of nurses around 400,000. So a 'real' gap of about 30,000.
It is a leaking bucket though due to the high leaving rate.