salary sacrifice enquiries “have gone parabolic since the Autumn Budget” as firms look to mitigate against the additional NI costs. Another says she “will be proactively communicating salary sacrifice as part of efficient tax planning moving forward” following last year’s Budget, while a third added: “We are actively encouraging our SME business clients to explore salary sacrifice as a way to offset some of the new NI costs.” Views below.
Wes Wilkes, CEO at IronMarket said, “Salary sacrifice enquiries have gone parabolic since the Autumn Budget. We’ve been rushed off our feet running clinics, webinars and workshops.
“Something that has always been available has suddenly become more acute for employers as they seek to mitigate the additional costs and at the same time maintain great benefits for their workforces.
“Pensions have seen the biggest impact and been the biggest beneficiary.”
Sam Newton, Director at Gravitate Accounting said, “We are actively encouraging our SME business clients to explore salary sacrifice as a way to offset some of the new NI costs.
“A surprisingly high number of business owners do not know the option is available, or how potentially powerful a tool it is. Many have been very enthusiastic once they have understood how it works.
“We plan to make good use of Salary Sacrifice internally too, where we are projecting to save around 22% of the increased costs through our own salary sacrifice scheme. We strongly advise other accountants to make sure their clients fully understand salary sacrifice, because it is a tremendous opportunity to save on employer costs, while also boosting your team’s net income.”
Anita Wright, Chartered Financial Planner at Bolton James said, “Salary sacrifice reduces the NI contributions that employers pay on their employees’ salaries, currently set at 13.8%.
“While I have not yet seen significant interest from my clients, I will be proactively communicating this as part of efficient tax planning moving forward. To illustrate the potential savings, consider an employee earning £36,000 per year.
“Under the current NI threshold, the employer’s NI contribution would be £3,712.20 per year. By implementing a salary sacrifice arrangement, this would reduce to £3,463.80, resulting in a saving of £248.40 per year per employee.
“When the NI rate rises to 15%, these savings will become even more substantial, making salary sacrifice an increasingly valuable strategy for businesses looking to manage costs efficiently.
“However, salary sacrifice may affect entitlements based on gross pay, such as mortgage applications, statutory benefits or death in service cover, so it is important to consider individual circumstances before opting in.”
