Employers’ pension contributions save NICs.
Posted by Administrator (admin) on Feb 19 2008 at 8:24 PM
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Employers’ pension contributions

save NICs. If your employer pays you

salary or bonus which you then invest in

your pension, both you and your employer have to

pay NICs. But if your employer pays contributions

directly into your pension scheme, the employer gets

the tax relief and there are no NICs to pay – saving the

employer’s NIC of 12.8% and your NICs as well. You

could arrange with your employer to cover the cost of

the contributions by reducing your salary or not taking

a bonus you are due. But HMRC is very particular

about how this should be done to be tax-effective