As I write, the Chancellor has not quite sat down from his second Budget speech of 2015. As expected, with a majority government and a guaranteed 5 year term the Chancellor went much further than in his previous Budget speeches.
So what are the headlines for Employee Benefits?
I have yet to see the official supporting text and document, but will comment further once I have done so. From the speech though, I can confirm that the following appear to be the key Employee Benefit components:
1) Insurance Premium Tax will increase to 9.5% from November. This will obviously have a cost implication to those benefits that are subject to this charge.
2) An expected limitation of pensions tax relief for the very highest earners in the UK (this is likely to be broadly in line with the Conservative manifesto commitments).
3) A new - and compulsory - national minimum wage from next year.
And, perhaps most significantly from an Employee Benefits perspective…
4) A Green Paper will be published on the merits (or otherwise) of a complete change to the pensions tax relief system - with the possible outcome of levelling reliefs with those of the current ISA regime. Make no mistake, this will be a major change, and would impact on every employer and saver in the UK.
The Chancellor made it clear that the Green Paper will not pre-judge the answer to these issues, but with so much money tied up in pensions tax reliefs it would be highly likely that some further significant change will occur in this space. Jelf Employee Benefits will comment further on these proposals once we have seen the detail of the proposals.
I am sure that I, or my colleagues, will be commenting further on the four points above over the coming days.
Best regards
Steve
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