Potential capping of Salary Sacrifice (speculation)?

artyboy

As we all love a bit of speculating on here... I don't think this one has been mentioned yet (and apologies if it has but I've missed it)

Basically a suggestion that the NI benefits to Salary Sacrifice pension contributions could be limited to a maximum of £2000 per year, with NI (employer and employee) becoming payable above that level.

Now... we can certainly question the likelihood/provenance, but in some ways this could be seen as a sneakily clever way of presenting it as closing a tax loophole for the wealthy. So... maybe...?

https://www.birminghammail.co.uk/news/cost-of-living/new-salary-sacrifice-rules-coming-32836714.amp

Dazed_and_C0nfused

artyboy said:

As we all love a bit of speculating on here... I don't think this one has been mentioned yet (and apologies if it has but I've missed it)

Basically a suggestion that the NI benefits to Salary Sacrifice pension contributions could be limited to a maximum of £2000 per year, with NI (employer and employee) becoming payable above that level.

Now... we can certainly question the likelihood/provenance, but in some ways this could be seen as a sneakily clever way of presenting it as closing a tax loophole for the wealthy. So... maybe...?

https://www.birminghammail.co.uk/news/cost-of-living/new-salary-sacrifice-rules-coming-32836714.amp

If it is true then it's yet another thing to add to the complexities of running payroll 😢

westv

I would say the clickbait headline is unlikely.

Cobbler_tone

westv said:

I would say the clickbait headline is unlikely.

Indeed. Raising IC AND heavily reducing the benefits of SS at the same time....someone would be on the bus with the DG of the BBC before it leaves the station.
Not forgetting that the role may be to raise some additional income but also to drive the economy. As one of my greatest mentors told me, "you can't save yourself to greatness", which in my personal career is most certainly true. Unless you are attempting to paper the cracks.

BlackKnightMonty

westv said:

I would say the clickbait headline is unlikely.

Even when published in the Financial Times?

https://on.ft.com/482NXevReeves plans £2bn Budget raid on UK retirement savings 

Cobbler_tone

BlackKnightMonty said:

westv said:

I would say the clickbait headline is unlikely.

Even when published in the Financial Times?

https://on.ft.com/482NXevReeves plans £2bn Budget raid on UK retirement savings 

It's not exclusive to either of those links and the £2,000 limit per year is fully doing the rounds, no doubt after a strategic leak....and/or the the nature of how the press operate these days. If that comes to fruition it won't be great for either employers or employees, who will ultimately pay the price. I'm surprised the BBC are not running it. 
I'm also surprised that capping relief at £2k only generates £2b. I guess there is the train of thought that if you are tinkering with the headlines rates or tax and NI, then anything else will go under the radar and most people won't understand the impact. 

hugheskevi

It seems to be one of the options HMRC consulted industry about.

Report can be read at this link.

BlackKnightMonty

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

Andy_L

BlackKnightMonty said:

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

or the vast majority of private sector workers who don't have access to SalSac schemes

westv

BlackKnightMonty said:

westv said:

I would say the clickbait headline is unlikely.

Even when published in the Financial Times?

https://on.ft.com/482NXevReeves plans £2bn Budget raid on UK retirement savings 

Effectively. It's a pay site.

westv

Andy_L said:

BlackKnightMonty said:

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

or the vast majority of private sector workers who don't have access to SalSac schemes

Where does it say that?