 | | |
| saspro wrote: Most pension schemes come out before tax. | |
| | |
This is before National insuranse as well, not just before tax. That's what is different about this...
| x404.co.uk http://www.x404.co.uk/forum/ |
|
| Moral dilemma http://www.x404.co.uk/forum/viewtopic.php?f=3&t=22381 |
Page 1 of 2 |
| Author: | koli [ Tue Jul 29, 2014 9:26 pm ] |
| Post subject: | Moral dilemma |
I would like to present you with a moral dilemma: My company is going to make a change in the way employees contribute to their workplace pensions. Currently (voluntary) employee pension contributions are deducted from the salary AFTER paying National Insurance (NI). Then they are paid into the scheme to my personal pension account. From next month, company will make following change: 1. Employess will NOT pay ANY contribution anymore 2. what I am paying now (or decide to pay in the future), company will pay instead (into my pension account), (e.g. £5,000 a year) 3. they will decrease my gross salary by that £5k 4. because my gross salary is 5k lower now, I will pay less NI 5. company will pay also less NI for me 6. 50% of company's saving from point 5, company will pay it into my pension account 7. the other 50% of company's saving will cover admin of this change and what's left (of the 50%) company will keep Outcome: 1. I get more money into my pension scheme (same 5k + what I saved on NI + 50% of company's saving) 2. Company gains little bit as well (not all of the 50% it saves but something at least...) 3. Less NI will be paid to gov's coffers Everything else will be uneffected, e.g. bonuses and benefits will be calculated from my notional pay (gross salary + £5k that company will pay as pension contrib) so I won't lose out in any way. Everybody will be enrolled in this change unless you ACTIVELY opt out or you will be worse off (in case of people who earn very low salary I guess) So, since tax avoidance and tax evasion (of companies and individuals) are topics people here feel strongly about, I want to know how many of you would opt out of this scheme because you believe this is morally wrong. If you wouldn't opt out, do you think there is an ethical problem? Is this in any way different than what Jimmy Carr, Chris Moyles and Katie Melua did by joining schemes to decrease their tax liabilites? |
|
| Author: | saspro [ Tue Jul 29, 2014 9:33 pm ] |
| Post subject: | Re: Moral dilemma |
Most pension schemes come out before tax. It's one of the benefits of having a pension. It sounds like they're just changing the scheme to a normal workplace pension scheme but wording it differently |
|
| Author: | koli [ Tue Jul 29, 2014 9:38 pm ] | |||||||||
| Post subject: | Re: Moral dilemma | |||||||||
This is before National insuranse as well, not just before tax. That's what is different about this... |
||||||||||
| Author: | l3v1ck [ Tue Jul 29, 2014 9:39 pm ] |
| Post subject: | Re: Moral dilemma |
My company has been doing that for ages. |
|
| Author: | davrosG5 [ Wed Jul 30, 2014 6:12 am ] |
| Post subject: | Re: Moral dilemma |
Sounds to me like a standard salary sacrifice/exchange scheme to me. That's how my employers do the pension now and has been for several years. It's a government/HMRC sanctioned way of saving into a pension. I view this as in the same league of tax avoidance as saving into a (N)ISA - it's essentially open to everyone unlike the aggressive tax avoidance schemes that pop up periodically in the press that celebrities and such like have been embroiled in. It's there to encourage a desirable activity in a large proportion of the working population - saving into a pension. |
|
| Author: | saspro [ Wed Jul 30, 2014 7:33 am ] | ||||||||||||||||||
| Post subject: | Re: Moral dilemma | ||||||||||||||||||
National insurance goes to the same pot as income tax anyway. No longer is it separated out to fund the NHS etc (they realised people didn't mind paying it if they thought it was for a good cause so they put the pots together and charged more) |
|||||||||||||||||||
| Author: | hifidelity2 [ Wed Jul 30, 2014 7:57 am ] | |||||||||
| Post subject: | Re: Moral dilemma | |||||||||
Agree - this is basically SoP for most Firms. My (old) Comapny did it |
||||||||||
| Author: | Zippy [ Wed Jul 30, 2014 8:24 am ] |
| Post subject: | Re: Moral dilemma |
We switched to this system 2 years ago. It's not morally wrong. |
|
| Author: | oceanicitl [ Wed Jul 30, 2014 8:25 am ] |
| Post subject: | Re: Moral dilemma |
No pie choice |
|
| Author: | John_Vella [ Wed Jul 30, 2014 9:05 am ] |
| Post subject: | Re: Moral dilemma |
Sounds fairly standard to me and not at all wrong. Sent from my big ass Sony Xperia Z Ultra tabphonelet, using Tapatalk 4. |
|
| Author: | koli [ Fri Aug 01, 2014 8:18 pm ] |
| Post subject: | Re: Moral dilemma |
Thanks for the input guys, seems like a routine change. However I do have to question the effectives of this. If somebody doesn't find pre-tax benefit sufficient to start saving for the pension, additional pre-NI saving won't change their mind. But hey, better for the rest of us  Would be interesting to hear from the person who would join but thinks it is wrong... |
|
| Author: | okenobi [ Sat Aug 02, 2014 8:55 am ] |
| Post subject: | Re: Moral dilemma |
That's me. I recognise why everybody thinks it isn't and I've no doubt Shockwaffle could opine for paragraphs on why I'm wrong and the bigger picture here. However, I've worked in corporate land for long enough to know that employers don't give a [LIFTED] about anything except money. Ripping off customers is standard practice. As is ripping off employees. (Not that I don't abhor both of those). Personally however, I find ripping off public pension/welfare funds a little too much. They've basically told you, "hey we've found a loophole to make more money at the expense of the public, but it's ok coz we'll cut you in." I don't like it. But yeah, of course I'd join, because you have no choice when you're employed and part of the system. If you can't beat 'em (which you totally can't) - join 'em. |
|
| Author: | saspro [ Sat Aug 02, 2014 1:52 pm ] |
| Post subject: | Re: Moral dilemma |
You'll get taxed & NI'd on your pension when you claim it so not paying it now means you're not being taxed twice. |
|
| Author: | ShockWaffle [ Sat Aug 02, 2014 4:19 pm ] | |||||||||
| Post subject: | Re: Moral dilemma | |||||||||
No need. I agree with Davros. |
||||||||||
| Author: | davrosG5 [ Mon Aug 04, 2014 8:05 am ] | ||||||||||||||||||
| Post subject: | Re: Moral dilemma | ||||||||||||||||||
|
|||||||||||||||||||
| Page 1 of 2 | All times are UTC |
| Powered by phpBB® Forum Software © phpBB Group https://www.phpbb.com/ |
|