The Treasury will postpone plans to crack down on salary sacrifice arrangements until after the referendum on EU membership, Money Marketing understands.
In the March Budget the Government dropped controversial reforms that would have redrawn the pension tax relief system.
But it said it would consult on restricting the workplace benefits that attract National Insurance Contribution relief.
However, a senior source at a provider says Treasury officials have indicated no action will be taken until after the June vote.
The Budget document revealed that the schemes, which limit National Insurance have increased in number by over 30 per cent since 2010.
The source says: “I don’t understand why salary sacrifice has to be shelved, it is nothing like as politically toxic as pension tax relief reform.”
But Tisa policy strategy director Adrian Boulding says: “Salary sacrifice plans were part of the whole mix of whether we reform pension tax relief. The official answer was there was no consensus but the reality is George Osborne is focused on the EU referendum. The last thing he would want is people voting to leave the EU because they saw it as a vote against him and his plans for pensions.”
The Budget document said: “The Government is considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes.
“However, the Government’s intention is that pension saving, childcare and health-related benefits such as cycle to work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.”