Salary Sacrifice & In year changes to pension contributions
Discussion
Hi, some advice needed please.
PAYE. Multinational.
Historically I have been able to change the pension contribution percentage through work portal - something like select the % change in August and change is effective in Sep pay. I've previously made changes perhaps 2/3 times a year depending on circumstances.
I've been informed by payroll that to be compliant with HMRC guidance, going forward I can make changes to the % once a year only - Dec when we select other benefit options available such as private medical and so on for the following year. "Making frequent changes increases the risk the arrangement is ineffective for Income Tax / NICs savings, potentially impacting you in a negative way."
Is this "once a year" thing real?
Thank you in advance.
PAYE. Multinational.
Historically I have been able to change the pension contribution percentage through work portal - something like select the % change in August and change is effective in Sep pay. I've previously made changes perhaps 2/3 times a year depending on circumstances.
I've been informed by payroll that to be compliant with HMRC guidance, going forward I can make changes to the % once a year only - Dec when we select other benefit options available such as private medical and so on for the following year. "Making frequent changes increases the risk the arrangement is ineffective for Income Tax / NICs savings, potentially impacting you in a negative way."
Is this "once a year" thing real?
Thank you in advance.
t. HR trying to reduce their workload at your expense. My employer does this. There's a three-week window in March when we're allowed to make changes to pension contribution, private medical benefits and similar stuff, then it's locked for the rest of the year. All changes take effect on April 1, which is also the date when pay rises and promotions happen. It's like they want to do all their HR admin for the year in one go and then shut up shop for 11 months except for joiners and leavers.
I'd never come across this at other places I'd worked, and it does seem really strange and restrictive. What if, say, your partner loses their job in May and you want to switch money from your pension contributions to your take-home pay? You'd have to wait almost a year.
I'd never come across this at other places I'd worked, and it does seem really strange and restrictive. What if, say, your partner loses their job in May and you want to switch money from your pension contributions to your take-home pay? You'd have to wait almost a year.
Granadier said:
What if, say, your partner loses their job in May and you want to switch money from your pension contributions to your take-home pay? You'd have to wait almost a year.
One would hope that they’d make an exception in exceptional circumstances. Success probably depends on whether your face fits.I'm PAYE at a multinational similar to OP. We had a portal which allowed changes 3 times per year. I used to take full advantage as bonuses and the incompetence at HMRC etc dictate. They got in touch and said "ideally" once per year. I asked why then does the portal allow 3 times per year? No answer. So, I kept doing as I pleased and they never said anything again. Some point in the past couple of years the portal changed and its now 12x so i presume HR knickers are getting knotty.
coetzeeh said:
"Making frequent changes increases the risk the arrangement is ineffective for Income Tax / NICs savings, potentially impacting you in a negative way."
Might be related to the upcoming changes to salary sacrifice. https://www.gov.uk/government/publications/changes...Bit early tho...
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