Overview

• HMRC’s survey asked 51 employers to assess scenarios that would remove income tax and National Insurance exemptions or limit NIC breaks to salary sacrificed below £2,000 per year.
• Analysis by pension experts estimates that scrapping both tax and NI perks could cost a worker on £35,000 up to £560 annually and add about £241 in NI charges for employers.
• Latest figures show relief on pension contributions cost £23.5 billion in National Insurance and £28.5 billion in income tax during 2023/24.
• A Treasury spokesperson labelled claims of impending cuts “totally speculative” and said the government remains committed to keeping taxes for workers low.
• Employers cautioned that any rollback of salary sacrifice benefits would hit staff morale and retention, with many backing a £2,000-only NIC exemption as the least disruptive option.