Government rushes through NI cap on pension salary sacrifice
The government has already drafted legislation to impose a £2,000 limit on NI exempt pension contributions under salary sacrifice arrangements. What else do we know?
Despite the limits to the amount of salary employees can sacrifice in exchange for tax free employer pension contributions not coming into force until April 2029, the government has already published the National Insurance Contributions (Employer Pension Contributions) Bill. According to media reports, this is due to the government wishing to "reassure the markets" that it is serious about introducing the cap, which is by and large another NI hike for employers.
The Bill does not tell us how the £2,000 cap will operate in practice, e.g. if an individual has two jobs or changes jobs part way through a tax year. It is understood that there will be a consultation in due course to decide on the details and operation of the £2,000 limit.
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