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UK to raise billions by cutting salary sacrifice pensions perk, OBR says
By Naomi Rovnick
LONDON (Reuters) -UK finance minister Rachel Reeves will raise 4.7 billion pounds ($6.18 billion) in extra tax revenue in 2029/30 from cutting a pensions tax perk for businesses and high earners, the Office for Budget Responsibility said on Wednesday.
Salary sacrifice for pensions is a popualar scheme for employers that shrinks taxable pay on which businesses pay national insurance contributions, by shifting it into pension pots.
The perk had created big savings for employers by reducing their national insurance contribution payments by 15% of the amount of salary sacrificed in lieu of pension benefits, while workers saved 8%.
Moving to charge the tax on salary sacrifice contributions would raise 4.7 billion pounds in 2029/30 and 2.6 billion pounds in 2030/31, the Office for Budget Responsibility said on Wednesday in an unexpected early release of its documents.
($1 = 0.7603 pounds)
(Reporting by Naomi Rovnick; Editing by Tommy Reggiori Wilkes)
