Pensions dashboard
To help the next generation to clearly view their pensions savings, the government will ensure the industry designs, funds and launches a pensions dashboard by 2019. This will mean an individual can view all their retirement savings in one place
Financial advice
Recommendations of the Financial Advice Market Review (FAMR) which aims to support the provision of affordable and accessible advice for everyone, at all stages of their lives have been approved. The government commits to implement all of the recommendations for which it is responsible, and will: consult on introducing a single clear definition of financial advice to remove regulatory uncertainty and ensure that firms can offer consumers the help they need increase the existing £150 Income Tax and National Insurance relief for employer- arranged pension advice to £500 consult on introducing a Pensions Advice Allowance. This will allow people before the age of 55 to withdraw up to £500 tax free from their defined contribution pension to redeem against the cost of financial advice. The exact age at which people can do this will be determined through consultation. This means that a basic rate taxpayer could save £100 on the cost of financial advice.
Public Sector Pension Schemes
The Chancellor also announced that employer contributions to unfunded public service pension schemes will increase the contributions employers pay to the schemes from 2019-20 onward. This will ensure that the costs of providing pension benefits in the future are fairly reflected in the contributions paid by employers, and that the pension promises made today are on a sustainable basis to ensure fairness to future tax payers.
Salary sacrifice
Salary sacrifice arrangements enable employees to give up salary in return for benefits-in-kind that are often subject to more favourable tax treatment than salary. The government wants to encourage employers to offer certain benefits but is concerned about the growth of salary sacrifice schemes: clearance requests for salary sacrifice arrangements from employers to HMRC have increased by over 30% since 2010. The government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes. However, the government’s intention is that pension saving, childcare and health-related benefits such as Cycle to Work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.
Shared Parental Leave
The government will launch a consultation in May 2016 on how to implement its commitment to extend Shared Parental Leave and Pay to working grandparents. The consultation will also cover options for streamlining the system, including simplifying the eligibility requirements and the potential to make better use of digital technology.
The government will also work with the Behavioural Insights Team to look at new ways to support parents in choosing how and when to return to work.
Tax administration and simplification
The government continues its work on simplifying the administration of tax. As previously announced, the Office of Tax Simplification (OTS) will become a permanent office of HM Treasury from April 2016.
Alignment of NICs and income tax
The OTS recently produced a lengthy report on income tax and NICs alignment. While announcing that the government will respond in due course, it has nevertheless commissioned the OTS to review the impacts of proceeding with two specific proposals: moving employee NICs to an annual, cumulative and aggregated basis, and moving employer NICs to a payroll basis. Terms of reference for this review will be published shortly.
CIPP Policy News Journal
25/04/2016, Page 178 of 453
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