Reeves<\/a> is also looking to legislate swiftly to close a loophole on \u201clow value imports\u201d, which is used by online retailers to send low-value consignments to Britain free of tariffs.<\/p>\nThat 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. \u201cWe\u2019ve got to get this right, but if we can do it earlier, we will,\u201d the Treasury official said.<\/p>\n
Some Budget optimism in the gilt market faded on Thursday, as investors\u2019 initial relief gave way to questions over the credibility of the chancellor\u2019s plans to rein in borrowing just ahead of the next general election.<\/p>\n
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.<\/p>\n
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 \u00a322bn in fiscal headroom was \u201ca bigger buffer built on shaky foundations\u201d.<\/p>\n
Analysts at Goldman Sachs said \u201cthe backloaded nature of the incremental consolidation announced at the Budget could lead investors to question whether it will ultimately be fully realised\u201d.<\/p>\n
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.<\/p>\n
It is estimated that the salary sacrifice tax raid will raise \u00a34.8bn in 2029-30, falling to \u00a32.5bn the following year. About 7.7mn people use salary sacrifice, according to government statistics.<\/p>\n
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.<\/p>\n
Additional and higher-rate taxpayers claim the extra relief through a self-assessment tax return that is paid back the following year.<\/p>\n
The impact of the salary sacrifice changes will be felt most among higher earners, with employees of most of Britain\u2019s 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.<\/p>\n
Someone earning a \u00a3150,000 salary and sacrificing 10 per cent into their pension will have to pay \u00a3260 more from April 2029, while their employer will have to pay an additional \u00a31,950, according to accounting firm Blick Rothenberg.<\/p>\n
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 \u00a38mn per year.<\/p>\n
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.<\/p>\n
Blick Rothenberg estimates that the changes were likely to cost the financial services sector \u201cabout \u00a31.2bn per year\u201d when the \u00a32,000 cap is introduced.\u00a0<\/p>\n
A Treasury official said: \u201cWe\u2019re wasting no time in delivering the measures set out in the Budget to cut the cost of living, cut waiting lists and cut debt. <\/p>\n
\u201cThese reforms will protect low and middle earners and bring fairness to a scheme that is disproportionately benefiting the wealthy and exploding in cost.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":163294,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,174,175],"class_list":{"0":"post-163293","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-ie","11":"tag-ireland","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/163293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=163293"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/163293\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/163294"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=163293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=163293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=163293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}