10 Jun 2014
Employers will be aware of the highly publicised changes to legislation in October 2012 which has paved the way to an auto enrolment pension scheme for every employee in UK. Over the 5½ year period, which follows, on a sliding basis starting with the largest companies, auto enrollment is becoming compulsory.
Whilst companies are free to decide how to implement the scheme, they must ensure that they have a satisfactory means in place to comply with the legislation, ahead of the deadlinefor their organisation size.
HMRC have recognised this as a proper means of taking advantage of an NIC payment exemption and the combined NICsaving across both parties can be over 13%. Commonly this saving is then apportioned between employer and employee.
Any form of salary sacrifice needs to be dealt with correctly;not only for it to ensure it does not fall foul of tax and pensions legislation but also to avoid inadvertently breaching employees contracts.
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