Readers' forum : Pension proportions

My employer operates a defined contribution pension scheme. At present let us say that the employer pays £100 into the scheme for me each month and pays me a salary of £1 000 from which I contribute another £100 to the scheme.

The employer has recently written to suggest that employees’ National Insurance contributions could be saved by restructuring the payments. The proposal is that employer will increase its contribution to £200 and simply pay me a reduced salary of £900  but I make no pension contributions.

Am I receiving a fair share of the National Insurance saving from this suggestion? Also will the apparent salary reduction have any other adverse effects?

Query 19 198– Employee

Reply by Castlegate

As the judge said in Cape Brandy Syndicate v CIR 12 TC 358 there is no equity about a tax. However this proposal is not really...