The budget always brings a wave of questions, exclamations and interest. We spoke tp Jeff Fox, principal, Aon Employee Benefits about some of the budg
The budget always brings a wave of questions, exclamations and interest. We spoke tp Jeff Fox, principal, Aon Employee Benefits about some of the budget and what it means.
“It is clear that the Chancellor wishes to keep his powder dry for what promises to be an eventful 2017.
In the main, employers have got the Budget they’ll have wanted – they have a period of stability, not least with a single fiscal event from next year. This means we should no longer see the tax cliff-edge of current Spring Budgets leading to immediate tax changes in the new tax year, sometimes only a few weeks apart.
·Optional remuneration arrangements will become effective on the 6 April 2017 and while we await the outcome on some key questions ahead of 20 March when the detailed regulations should be published, no further updates were offered in the budget.
· Many employers are comforted by the salary sacrifice grandfathering arrangements in place until April 2018 (for most benefits) but this could be misplaced. It is fragile and easily disturbed. Employers need to watch out for post April 2017 as life event, new joiner and other business process changes may knock away the grandfathering provisions, causing optional remuneration arrangements to apply immediately.”
When it comes to Pensions/retirement savings Debbie Falvey, DC Proposition Leader, Aon Employee Benefits said:
“Although the Spring Budget hasn’t created a migraine for HR and employers, there are still plenty of ongoing headaches about how to manage restrictions to pension savings such as the reduced MPPAThe Lifetime ISA will be an interesting addition to the ISA family, but there are ongoing doubts about how it’s going to interact with pension savings and continuing concerns about the impact on auto-enrolment opt-out rates. There is still a lack of detail about LISA and the providers ready to offer them. Employers will need to make decisions about how to implement them as part of their benefits strategy.”
We’ll be sure to keep you posted on more of the news as it comes in.