Source · Select Committees · Work and Pensions Committee
Recommendation 15
15
Not Addressed
Paragraph: 108
We welcome the Government’s recognition of the importance of addressing the fact that some low...
Recommendation
We welcome the Government’s recognition of the importance of addressing the fact that some low earners (disproportionately women) miss out on tax relief because their pension scheme uses the ‘net pay’ arrangement for tax relief. Given this is a long-standing concern, it is disappointing that the first payments will not be made until 2025/26 and that those eligible will have to take action to receive payment. We recommend HM Treasury consider whether payments can be brought forward and, if not, whether arrangements can be put in place for backdating payments, at least to 2021/22, when the plans to equalise outcomes for low earning pension savers were first announced. We urge the Government to set out its strategy for maximising take-up and explain how it will work with stakeholder organisations on this.
Government Response Summary
HMRC is not actively considering automatically enrolling the self- employed via the NICs system because their systems are not designed to collect or administer pension contributions, and it would present a significant challenge as new systems would be required.
Paragraph Reference:
108
Government Response
Not Addressed
HM Government
Not Addressed
Response from HM Treasury Regarding the committee’s recommendation to increase Class 4 NICs, with the increased amount being diverted into a pension scheme, the government keeps all taxes, including NICs, under review. HMRC is not actively considering automatically enrolling the self- employed via the NICs system. HMRC systems are not designed to collect or administer pension contributions; it would present a significant challenge as new ones would be required. This would prove to be difficult at a time where the government is already delivering major projects to modernise the administration of tax and pension savings.