A new employment tax came into force on Monday, but only if you are unfortunate enough to work for a very large employer, by very large employer I mean a company with over 120,000 employees, that’s large. Employees will be taxed at 1% and the employer will also be taxed at 1% to begin with but will rise to 3% and 2% from 2016 to oct 2017 and then finally 5% and 3% after that. All employees and workers will be eligible to join over the age of 21 earning more than 8,105 (this figure will rise year on year). The company I work for has a staging date of 1st February 2014 (we have 290 employees) and nearly all employers will be “in it” by 1st October 2015 with some stragglers joining the party as late as 1st Feb 2018.
All workers have the right to “opt-out” but employers are not allowed to suggest that they do or make it easy to do so in any way. Opt out has to be in writing only and not prompted.
The default scheme will be NEST (National Employment Savings Trust) which will be shit, they take a charge out of every transaction sent and will undoubtedly lose the money.
Interestingly, it is the first ever tax in the UK (although you’re not supposed to call it tax) that is specifically earmarked for a particular thing, retirement.
Self-employed “workers” are probably entitled to the pension as a recent Tribunal decided in the judges’ infinite wisdom.
It’s all really good fun, I can’t wait.