Salary sacrifice cap announcement from the budget

MDMD

Paywalled but according to the FT they are legislating for it immediately 

https://www.ft.com/content/eec4d6e3-6c80-42f9-aa1c-fcbcf37e98dc

UK chancellor Rachel Reeves is to rush through laws to enact her Budget to reassure nervous markets that key tax increases will definitely be implemented even if they do not kick in for several years. Legislation for a crucial £4.8bn tax rise on pension contributions made through salary sacrifice schemes is expected to be introduced before Christmas, even though it will not take effect until April 2029, officials said.

Notepad_Phil

MDMD said:

Paywalled but according to the FT they are legislating for it immediately 

https://www.ft.com/content/eec4d6e3-6c80-42f9-aa1c-fcbcf37e98dc

UK chancellor Rachel Reeves is to rush through laws to enact her Budget to reassure nervous markets that key tax increases will definitely be implemented even if they do not kick in for several years. Legislation for a crucial £4.8bn tax rise on pension contributions made through salary sacrifice schemes is expected to be introduced before Christmas, even though it will not take effect until April 2029, officials said.

Not sure it will actually sooth nervous markets (particularly long term) if that's the real reason - legislation can always be amended in future years, so what's the real difference between a chancellor just changing their mind and a chancellor changing their mind and having to alter some laws that were referring to how something would operate in a future tax year..

Eldi_Dos

Notepad_Phil said:

MDMD said:

Paywalled but according to the FT they are legislating for it immediately 

https://www.ft.com/content/eec4d6e3-6c80-42f9-aa1c-fcbcf37e98dc

UK chancellor Rachel Reeves is to rush through laws to enact her Budget to reassure nervous markets that key tax increases will definitely be implemented even if they do not kick in for several years. Legislation for a crucial £4.8bn tax rise on pension contributions made through salary sacrifice schemes is expected to be introduced before Christmas, even though it will not take effect until April 2029, officials said.

Not sure it will actually sooth nervous markets (particularly long term) if that's the real reason - legislation can always be amended in future years, so what's the real difference between a chancellor just changing their mind and a chancellor changing their mind and having to alter some laws that were referring to how something would operate in a future tax year..

Parliamentary scrutiny springs to mind.

Albermarle

MDMD said:

Paywalled but according to the FT they are legislating for it immediately 

https://www.ft.com/content/eec4d6e3-6c80-42f9-aa1c-fcbcf37e98dc

UK chancellor Rachel Reeves is to rush through laws to enact her Budget to reassure nervous markets that key tax increases will definitely be implemented even if they do not kick in for several years. Legislation for a crucial £4.8bn tax rise on pension contributions made through salary sacrifice schemes is expected to be introduced before Christmas, even though it will not take effect until April 2029, officials said.

I wonder why the implementation date is so far ahead anyway? Surely systems could be adapted within a couple of years?

Grumpy_chap

Eldi_Dos said:

Notepad_Phil said:

Not sure it will actually sooth nervous markets (particularly long term) if that's the real reason - legislation can always be amended in future years, so what's the real difference between a chancellor just changing their mind and a chancellor changing their mind and having to alter some laws that were referring to how something would operate in a future tax year..

Parliamentary scrutiny springs to mind.

Albermarle said:

I wonder why the implementation date is so far ahead anyway? Surely systems could be adapted within a couple of years?

Yes, I thought that was rather odd that several of the measures announced are not proposed to come into effect until 2028 or 2029.

Particularly as the next UK GE has to be by Autumn 2029 so could well be called before the measures proposed for 2029 come into reality and when the measures for 2028 just begin to bite.

If there are measures that fall after the next GE, it is entirely possible that the proposals could be repealed by Parliament.

Notepad_Phil

Eldi_Dos said:

Notepad_Phil said:

MDMD said:

Paywalled but according to the FT they are legislating for it immediately 

https://www.ft.com/content/eec4d6e3-6c80-42f9-aa1c-fcbcf37e98dc

UK chancellor Rachel Reeves is to rush through laws to enact her Budget to reassure nervous markets that key tax increases will definitely be implemented even if they do not kick in for several years. Legislation for a crucial £4.8bn tax rise on pension contributions made through salary sacrifice schemes is expected to be introduced before Christmas, even though it will not take effect until April 2029, officials said.

Not sure it will actually sooth nervous markets (particularly long term) if that's the real reason - legislation can always be amended in future years, so what's the real difference between a chancellor just changing their mind and a chancellor changing their mind and having to alter some laws that were referring to how something would operate in a future tax year..

Parliamentary scrutiny springs to mind.

You might hope so, but nope I really don't see much going on if the Labour Chancellor and Prime Minister believe it to be advantageous to their chances of keeping Labour as the majority party in the next election. Can you really see the Conservatives going full tilt against a tax decrease - they might say that there should also be a decrease in state spending, but with the Labour majority it would still easily get passed even if every other party votes against it.

Albermarle

Grumpy_chap said:

Eldi_Dos said:

Notepad_Phil said:

Not sure it will actually sooth nervous markets (particularly long term) if that's the real reason - legislation can always be amended in future years, so what's the real difference between a chancellor just changing their mind and a chancellor changing their mind and having to alter some laws that were referring to how something would operate in a future tax year..

Parliamentary scrutiny springs to mind.

Albermarle said:

I wonder why the implementation date is so far ahead anyway? Surely systems could be adapted within a couple of years?

Yes, I thought that was rather odd that several of the measures announced are not proposed to come into effect until 2028 or 2029.

Particularly as the next UK GE has to be by Autumn 2029 so could well be called before the measures proposed for 2029 come into reality and when the measures for 2028 just begin to bite.

If there are measures that fall after the next GE, it is entirely possible that the proposals could be repealed by Parliament.

Although Opposition politicians tend to oppose any tax rise by a Govt, they are unsurprisingly reluctant to give up the revenue when in office.
Also 'reinstate higher salary sacrifice limits' is hardly a blood stirring rallying call, especially when most people are unaffected by it and/or have no understanding of it.

Grumpy_chap

Albermarle said:

Also 'reinstate higher salary sacrifice limits' is hardly a blood stirring rallying call, especially when most people are unaffected by it and/or have no understanding of it.

However, the media have jumped on it as punishing the working people.  If the media continue that lines and double-down at GE time, it may take on a significance far greater than it deserves and it won't matter that so many people are unaffected by or do not understand the change.