Former pensions minister Sir Steve Webb said independent schools face 'additional financial pressure' if the Chancellor decides to levy national insurance on employer pension contributions
Former pensions minister Sir Steve Webb said independent schools face 'additional financial pressure' if the Chancellor decides to levy national insurance on employer pension contributionscould face a “double whammy” of tax hits if Rachel Reeves introduces a levy on their staff pension contributions in the Budget later this month, experts have warned.
Tom Selby, director of public policy at investment platform AJ Bell, said an NI pensions levy would “effectively be a second tax increase” on top of the VAT policy, which is the “definition of a double whammy”. The Government estimates that the cost of not charging NI on the pension contributions made by employers is around £23.8bn.
“The implications would be additional financial pressure on independent schools, which has already led some schools to change the pension offering to their teachers,” Sir Steve toldIf changes to employer NI contributions are implemented, it could prompt a further exodus of private schools from the Teachers Pension Scheme , which is a generousThe employer contribution rate for the TPS has been creeping up since 2019, rising from 16.38 per cent to 23.68 per cent.
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