Pensions - Articles - Broadstone comments on emergency Budget

 “There is increasing speculation that next month's budget could see salary sacrifice under attack. Trying to stop salary sacrifice arrangements would be legally tricky, as it would be difficult to accurately identify when such exchanges were taking place. However, an easier solution - and one that would generate considerably more revenue for HMRC - would simply be to start charging employer and employee NI on all pension contributions. Salary sacrifice would still be possible, but would no longer help to reduce NI payments.

 “This raises an interesting question in relation to DB schemes. Would the Government require NI to be paid in relation to DB scheme contributions? What about DB scheme contributions in relation to a past service deficit? Such contributions are not specific to any employee, so it is not clear how any NI contribution rate would actually be calculated. But if there is the possible threat of NI contributions somehow applying to DB deficit funding, there might just be an argument to accelerate any agreed deficit funding now, in case the Chancellor has a nasty surprise up his sleeve.”