PENSION AND NI

[lethbridge]

AN EMPLOYEE WISHES HIS EMPLOYER TO CONTRIBUTE OVER £50,000 INTO HIS PENSION FUND INSTEAD OF TAKING A SALARY. I UNDERSTAND THE EMPLOYEE WILL PAY TAX ON ANY CONTRIBUTION OVER £50,000 WHICH IS NOW THE MAXIMUM.
WILL THE CONTRIBUTION BE AN EMPLOYEE BENEFIT AND WILL THE EMPLOYER OR EMPLOYEE PAY NI.

THANKS FOR ANY HELP

[tax_schmax]

Previous contribution history and salary details are important for this question. Can you provide more detail?

[lethbridge]

the emplyee has paid max allowable contributions for some years. does this help?

[tax_schmax]

No, we need numbers. Allowable contributions vary based upon income and the old rules vary depending upon how the scheme was being funded. In addition, the company contribution can not reduce an income below minimum wage. The company contribution can be challenged by HMRC if it is not "appropriate". Try and provide as much detail as you feel comfortable sharing in an open forum such as this. If you'd rather "whisper" the facts and figures, you can always use the PM feature to send a private mail.

[lethbridge]

I will try to gather info you require.

However, my question is only 'Is Ni payable on contributions over £50,000 as if it were a benefit?'
We are aware that no relief is available to pay higher contribution than the £50,000 maximum.

[lethbridge]

Current salary is £135,000PA. Employer has paid £55000 pension for last 10 years or so.

Appreciate if current contributions were made the employee will face tax bill on £5000. Will it be a benefit and will it be subject to NI.

[tax_schmax]

Sorry for the delay.

In the opening post, you say he wants over 50K in pension instead of salary. You have clarified that there was an employer contribution of over £50K anyway. Is the employee planning to take a £190K salary and sacrifice this down to £135K? Or is he planning to reduce the £135K down to £85K or so? I'm confused.