No change to tax free cash on 26 November

Cus

michaels said:

westv said:

Marcon said:

westv said:

It tells us what we all knew anyway. It was never going to happen.

You mean apart from all those who have rushed to withdraw huge amounts of tax free cash in case...?

I was excluding idiots.

Idiots who thought taking money now and paying a small amount of tax on interest whilst drip feeding it into an ISA was a small price worth paying to protect against the risk of paying 30% or 40% on 156k - there are certainly idiots....

This risk is always there, for every budget going forward. To make that call (either way) in general makes sense, unless driven purely by speculation from recent right wing media scaremongering.  To be swayed by current unsubstantiated rumours could be called idiotic

Marcon

dunstonh said:

It was reported in the Times last Friday.   It took the other outlets longer.  Possibly to allow them to scaremonger more.... oh, cynical me...

Odd that nobody here posted it then.

Albermarle

michaels said:

Yes - but having floated the idea we can all be happy that we are might be 'only' seeing a 2% tax rise on all pension drawdown above the TFLS - phew....

Corrected that for you .
Nothing confirmed so far.

DRS1

Marcon said:

dunstonh said:

It was reported in the Times last Friday.   It took the other outlets longer.  Possibly to allow them to scaremonger more.... oh, cynical me...

Odd that nobody here posted it then.

I think it got mentioned on a speculation thread (about salary sacrifice) and someone asked when we were going to get a stand alone thread on TFLS speculation.  I thought this thread was the result of that question.

poseidon1

Hmmm, couple a posited 2% tax rise with a possible halving  of the  cash ISA limit and falling interest rates ,  a potential  perfect storm brewing for pensioner savers on the near horizon.

Somebody

Marcon said:

Brie said:

can't access the article due to a pay wall - can you give us the highlights please?

The raid will be targeted at so-called “salary sacrifice” schemes, which allow workers to put money into their retirement pots before it is subject to any income tax or NI.

Companies benefit from lower employer NI contributions when staff take advantage of these schemes because the tax is only levied on pay left over after pension contributions.

To avoid the potential extra employees NIC on salary sacrifice, how about changing one's employment contract and amend salary sacrifice/exchange into a non-contributory pension?  No mention of salary sacrifice on the payslip, same taxable/NIC pay, no change in the employee's take home pay and the employer still pays the same amount into the pension.

hugheskevi

Somebody said:

To avoid the potential extra employees NIC on salary sacrifice, how about changing one's employment contract and amend salary sacrifice/exchange into a non-contributory pension?  No mention of salary sacrifice on the payslip, same taxable/NIC pay, no change in the employee's take home pay and the employer still pays the same amount into the pension.

I think that would be fine at scheme level, with everyone at the same non-contributory level. It would probably also be okay if there were different levels for different groups of staff. But I think employers would be nervous about doing it at individual level as it would look like flouting the rules with no reasonable justification. 

It would also be awkward for staff as they would no longer have a salary of reference to use for things like mortgage, so unless that didn't matter for an employee's personal circumstances (eg mortgage applications)  it could cause issues elsewhere.

When salary sacrifice started to become more widespread 20-odd years ago, it was initially viewed by employers as a loophole, and something that might well get closed off. It didn't, and employers became more confident, particularly when automatic enrolment lead to loosening of rules around changes being a genuine change of contract, with changes becoming more frequent. I can see a return to the attitude of those early days, where employers are cautious until the exact rules and enforcement become clear.

Sea_Shell

Marcon said:

Brie said:

can't access the article due to a pay wall - can you give us the highlights please?

Rachel Reeves will not cut the tax-free pension lump sum limit in the Budget this month, officials have confirmed.

The Treasury has ruled out making changes to the amount of money that can be taken from a pension without incurring income tax, amid reports of panicked withdrawals from retirement pots.

.....

They'll just announce that the age you can get it will be raised to 60 !!!!!   

Marcon

hugheskevi said:

Somebody said:

To avoid the potential extra employees NIC on salary sacrifice, how about changing one's employment contract and amend salary sacrifice/exchange into a non-contributory pension?  No mention of salary sacrifice on the payslip, same taxable/NIC pay, no change in the employee's take home pay and the employer still pays the same amount into the pension.

I think that would be fine at scheme level, with everyone at the same non-contributory level. It would probably also be okay if there were different levels for different groups of staff. But I think employers would be nervous about doing it at individual level as it would look like flouting the rules with no reasonable justification. 

It would also highlight the fact that those on minimum wage can't be part of a (newly) non-contributory scheme unless the employer is willing to swallow what would effectively be a 5% pay rise for them.

Cobbler_tone

Marcon said:

hugheskevi said:

Somebody said:

To avoid the potential extra employees NIC on salary sacrifice, how about changing one's employment contract and amend salary sacrifice/exchange into a non-contributory pension?  No mention of salary sacrifice on the payslip, same taxable/NIC pay, no change in the employee's take home pay and the employer still pays the same amount into the pension.

I think that would be fine at scheme level, with everyone at the same non-contributory level. It would probably also be okay if there were different levels for different groups of staff. But I think employers would be nervous about doing it at individual level as it would look like flouting the rules with no reasonable justification. 

It would also highlight the fact that those on minimum wage can't be part of a (newly) non-contributory scheme unless the employer is willing to swallow what would effectively be a 5% pay rise for them.

I think this area (SS) will be very interesting. Our business already provide large increases to the lower paid to ensure they can SS to 6% and remain above NMW. With the increases to NMW this comes at a cost above a lot of people's pay rises, i.e. the regular 2-3% we get annually.
I looked at my own situation and if the speculation is correct, it could cost me £150+ net a month based on my current choices. I heard this morning the talk of the impact on things like 'cycle to work' schemes etc. I am sure the devil will be in the detail and hopefully if nothing changes before April it won't have too much personal impact.

With poor Q3 growth, it is building up to be a rocky time.