Torygraph suggesting salary sacrifice to go

MK62

When you look at who are the biggest beneficaries of salary sacrifice,  (and higher rate tax relief), and the cost relative to benefit, then it would be surprising if they weren't on the radar for any government looking to reduce the budget deficit and the national debt. That doesn't necessarily mean they will act to reduce or remove them though.......any responsible government should be constantly looking at and reviewing such schemes.

artyboy

MK62 said:

When you look at who are the biggest beneficaries of salary sacrifice,  (and higher rate tax relief), and the cost relative to benefit, then it would be surprising if they weren't on the radar for any government looking to reduce the budget deficit and the national debt. That doesn't necessarily mean they will act to reduce or remove them though.......any responsible government should be constantly looking at and reviewing such schemes.

Well as a HR taxpayer, salsac only saved me 2% NI, so (at least from an employee perspective), the larger benefit is actually to BR taxpayers...

kimwp

artyboy said:

MK62 said:

When you look at who are the biggest beneficaries of salary sacrifice,  (and higher rate tax relief), and the cost relative to benefit, then it would be surprising if they weren't on the radar for any government looking to reduce the budget deficit and the national debt. That doesn't necessarily mean they will act to reduce or remove them though.......any responsible government should be constantly looking at and reviewing such schemes.

Well as a HR taxpayer, salsac only saved me 2% NI, so (at least from an employee perspective), the larger benefit is actually to BR taxpayers...

Does it not save you tax as well? 

NickPoole

The Telegraph also told us that Tax Free Lump Sums were going and tax relief would be limited to 20% (or 25% depending on their mood)

DavidT67

Pension contributions attract tax relief, whether salary sacrifice, relief at source, or net pay. 

The greatest saving with salary sacrifice is the employer NI cost saved.

Sometimes the employee benefits from that, but not always, and less so since April when employer NI costs increased.

artyboy

kimwp said:

artyboy said:

MK62 said:

When you look at who are the biggest beneficaries of salary sacrifice,  (and higher rate tax relief), and the cost relative to benefit, then it would be surprising if they weren't on the radar for any government looking to reduce the budget deficit and the national debt. That doesn't necessarily mean they will act to reduce or remove them though.......any responsible government should be constantly looking at and reviewing such schemes.

Well as a HR taxpayer, salsac only saved me 2% NI, so (at least from an employee perspective), the larger benefit is actually to BR taxpayers...

Does it not save you tax as well? 

Well yes of course, but I could equally have saved tax via any other pension scheme.

Point I'm making is that the relative benefit of salsac to non-salsac is greater for BR taxpayers because they get a greater NI saving.

Cobbler_tone

I wouldn't worry. The basic rate tax band is also being raised to £20,000 (or £25,000 for married couples), along with the increased incentive to have loads of kids to look after us into old age.
It's not surprising but people do read these articles and pass them off as fact. Surely we have learnt that those without power will say just about anything in an attempt to get power, followed with "there is no magic wand".

Whoever tinkers with tax relief from pensions (exc potentially company NI savings as most won't pass them on) wouldn't be very popular.

Hoenir

Cobbler_tone said:

Whoever tinkers with tax relief from pensions (exc potentially company NI savings as most won't pass them on) wouldn't be very popular.

Doing the right thing has nothing to do with popularity. Sometimes it's neccessary to make tough choices. 

ali_bear

Successive governments have tried to incentivize pension savings while also not forcing those on low incomes into deeper poverty. You can expect this to continue. 

Cobbler_tone

Hoenir said:

Cobbler_tone said:

Whoever tinkers with tax relief from pensions (exc potentially company NI savings as most won't pass them on) wouldn't be very popular.

Doing the right thing has nothing to do with popularity. Sometimes it's neccessary to make tough choices. 

OK Rach 

The word "neccessary" (sic) is entirely subjective. Was scrapping the winter fuel allowance the 'right thing'? It doesn't appear so as they slowly turn that boat around. 

You're right though. Whether it is increasing the basic rate tax limit to £20k at the expense of something else (I read that could cost £90b), tinkering with IHT, bouncing NI up and down, making the super rich pay even more tax, giving out/cutting certain benefits etc...it will never be universally popular. There will always be a group who are negatively impacted.
The best post on here recently was pointing out not to worry or complain about things that you have no control over. I've lived by that mantra for years and it's pretty liberating.