Could the Chancellor introduce NICs on employer pension contributions?
At REBA, we’re hearing very strong rumours that there may be an announcement in the 30 October Budget that employers’ NICs on employer pension contributions may be introduced.
Prime minister Sir Kier Starmer has already warned that this year’s Budget will be painful. Yet, with manifesto promises not to increase income tax, VAT or National Insurance, alternative sources of revenue will have to be sought.
It is thought that ending tax relief on employers’ NICs on employer pension contributions would generate substantial revenue for HM Treasury. However, it could have unforeseen consequences for workplace pensions savings.
We at REBA have teamed up with the Association of British Insurers (ABI) to gauge what impact, if any, levying employers’ NICs on employer pensions contributions could have.
This is a strictly apolitical survey. We want honest, robust evidence-based data that REBA and the ABI can use to feed into HM Treasury thinking ahead of the Budget.
Calls to reform pensions tax relief to make the system fairer and simpler have been made numerous times. The Institute for Fiscal Studies’ A blueprint for a better tax treatment of pensions sets out a case for making this change, as does the Fabian Society’s The case for reforming pensions tax relief.
The Fabian Society’s general secretary, Andrew Harrop, believes that reform of pension tax relief should be a priority for this government.
However, given the impact introducing employers’ NICs on employer pension contributions could have on the workplace, we at REBA and the ABI are keen to ensure your voice is heard.
The more responses we get to this survey the more HM Treasury and the Chancellor will take note. Please share this link with peers responsible for pensions and/or employer NICs at other employers too.
