Howden urges SMEs to maximise tax efficiency opportunity to address retirement savings crisis following the Budget

Following last week’s budget, leaders at Howden Employee Benefits are urging SMEs to maxcimise any tax efficiency opportunities.

Glenn Thomas CEO & Global Practice Leader – Howden Employee Benefits said, “With 5.6 million small businesses[i] employing 16.7 million employees in the UK, SMEs are the backbone of our national economy. The budget presents a golden opportunity for these businesses to maximise tax efficiencies and rethink their pension and wider remuneration strategies.

“As advisers to thousands of UK SMEs, we’re encouraging clients to address the Chancellor’s Employer National Insurance hike by considering salary exchange if they haven’t already.

“While SMEs face higher Employer National Insurance (NIC) contributions and increased tax bills, they can address both these challenges and address the UK’s retirement shortfall. By implementing salary sacrifice, employers can save 15% on Employer NICs on employees’ pension contributions, helping offset some additional costs whilst making a positive contribution to their employee’s retirement outcomes

“With upcoming changes to auto-enrolment contribution thresholds and the removal of the lower limit, now is the perfect time to review both pension contributions and broader remuneration strategies.”

[i] Business population estimates for the UK and regions 2023: statistical release – GOV.UK

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