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UK chancellor Rachel Reeves is to rush through laws to enact her Budget to reassure nervous markets that key tax increases will definitely be implemented even if they do not kick in for several years.

Legislation for a crucial £4.8bn tax rise on pension contributions made through salary sacrifice schemes is expected to be introduced before Christmas, even though it will not take effect until April 2029, officials said.

The plan to cap the amount of money people can sacrifice from wages for their pensions without paying national insurance at £2,000 a year is the biggest tax rise Reeves unveiled on Wednesday.

While Budget measures are enacted through a general finance bill, separate legislation covering the NI change will be introduced in the “next few weeks”, one Treasury official said.

“We want markets to know that this is all definitely happening — there can be no doubt about that,” one minister said. Another minister said: “We need to legislate on all of the Budget to give confidence it’s coming in.”

Reeves is also looking to legislate swiftly to close a loophole on “low value imports”, which is used by online retailers to send low-value consignments to Britain free of tariffs.

That is not due to take effect until April 2028, but the chancellor has told colleagues she would like to close the loophole earlier, if possible. “We’ve got to get this right, but if we can do it earlier, we will,” the Treasury official said.

Some Budget optimism in the gilt market faded on Thursday, as investors’ initial relief gave way to questions over the credibility of the chancellor’s plans to rein in borrowing just ahead of the next general election.

The 10-year gilt yield was up 0.03 percentage points at 4.45 per cent, meaning some of the Budget day rally had dissipated. Yields move inversely to prices.

Investors have been inundated since the Budget with research from investment banks highlighting the risk that planned tax rises and spending cuts fail to happen, with BNP Paribas saying the £22bn in fiscal headroom was “a bigger buffer built on shaky foundations”.

Analysts at Goldman Sachs said “the backloaded nature of the incremental consolidation announced at the Budget could lead investors to question whether it will ultimately be fully realised”.

Ministers said the plan had always been to pass early legislation to enact the entire Budget to reassure markets that they would not lose their nerve on tax rises ahead of an election that must happen by summer 2029.

It is estimated that the salary sacrifice tax raid will raise £4.8bn in 2029-30, falling to £2.5bn the following year. About 7.7mn people use salary sacrifice, according to government statistics.

The higher level in the first year of implementation reflects some workers paying into pension schemes through another route where tax relief is only given upfront at the basic rate.

Additional and higher-rate taxpayers claim the extra relief through a self-assessment tax return that is paid back the following year.

The impact of the salary sacrifice changes will be felt most among higher earners, with employees of most of Britain’s largest employers participating in such schemes. A survey by Willis Towers Watson found that more than 90 per cent of large employers provide salary schemes.

Someone earning a £150,000 salary and sacrificing 10 per cent into their pension will have to pay £260 more from April 2029, while their employer will have to pay an additional £1,950, according to accounting firm Blick Rothenberg.

Analysis by consultancy Hymans Robertson estimates that for companies with more than 10,000 employees, with staff on high salaries and strong pension provision, employment costs could increase by more than £8mn per year.

Salary sacrifice schemes are particularly popular in sectors that pay the largest bonuses, where the bonus can be paid directly into the pension to keep salaries suppressed below key thresholds and help boost retirement savings, particularly among those close to retirement.

Blick Rothenberg estimates that the changes were likely to cost the financial services sector “about £1.2bn per year” when the £2,000 cap is introduced. 

A Treasury official said: “We’re wasting no time in delivering the measures set out in the Budget to cut the cost of living, cut waiting lists and cut debt.

“These reforms will protect low and middle earners and bring fairness to a scheme that is disproportionately benefiting the wealthy and exploding in cost.”