Contents
A word to the wise
Employee pensions
A matter of trust
Pension policies
Family tax planning
Mr and Mrs
Inheritance tax
Employee cars and fuel
Borrowings and tax
Tax-free perks
Two jobs = too much NIC?
Give generously and save tax
Children's savings?
Company or trade?
Capital gains
Business tax
Investment limits
Should VAT be flat?
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If you are a member of an employer's pension scheme, you can contribute from your salary and get tax relief. However, your salary is subject to NIC, and that doesn't get reduced by pension contributions that you pay. The employer pays 12.8% on most salaries, and employees pay 11% up to a salary of about £38,500 and 1% after that. If the employer pays pension contributions directly into the fund on an employee's behalf, there is no income tax and no NIC. Suppose an employee has a salary of £30,000, and gets £1,000 in salary to pay into the fund. That will cost the employer £1,128, and the employee will be able to invest £890 after NIC. If the employer puts £1,000 into the fund, there is a combined benefit to both of £238. It's a very basic plan, but it needs to be done properly to make sure that the Revenue can't argue there was "really" a payment to the employee anyway - it's worth taking advice if you are going to make a so-called "salary sacrifice".
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