Press release: Tax body welcomes clarity that sacrificing salary for pension contributions is safe from review

The Association of Taxation Technicians (ATT) has welcomed today’s announcement in the Budget that salary sacrifice schemes involving pension savings are not within a Government review.

This is despite the Government continuing to review the use of salary sacrifice schemes with a view to potentially restricting their usefulness.

Ralph Pettengell, ATT Deputy President, said:

“It is certainly good news that the Government has sought to clarify the rumours circulating in the press in the days before the Budget that any review of salary sacrifice arrangements would impact upon arrangements that allow employees to give up an element of their salary in return for a contribution to their pension scheme by their employer. 

“Today employees want flexibility in their remuneration packages to be able to build them to suit their personal circumstances and this type of arrangement is mutually beneficial to employers and employees. Any restriction on it would have negatively impacted on the level of pension savings individuals have available on retirement.”

The Government also announced that salary sacrifice arrangements involving childcare or health benefits, such as the Cycle to Work scheme, will also continue to benefit from income tax and national insurance relief.