Lewin Higgins-Green
Lewin Higgins-Green leads FTI Consulting’s Employment Tax & Reward offering in the UK. Lewin works with clients across a wide range of sectors, with a strong focus on financial services, and advises clients on employee related tax matters, both for domestic and internationally mobile employees. Lewin is a chartered tax advisor and a member of the Employment Taxes Technical Sub-Committee of the Chartered Institute of Taxation.
Practice Areas
Panel
- Contributing Author
Membership
- Chartered Institute of Taxation
Education
- University of Exeter LLB (1st) 2004-2007
13 Contributions by Lewin Higgins-Green
PRACTICE NOTES
Implementing Salary Sacrifice: HMRC requirements, contractual variation, communications, clearance and compliance, including FA 2017 rules and the April 2029 £2,000 NICs exemption cap for pension salary exchange (UK)
FORTHCOMING CHANGE:
On 26 November 2025, within Budget 2025, it was confirmed that from April 2029 only the first £2,000 each tax year of pension saving made under a salary sacrifice arrangement will escape National Insurance contributions (NICs). Any amount an employee sacrifices above £2,000 a year will attract both employer and employee NICs, meaning the surplus over £2,000 will, for NICs, be handled in the same manner as other employee workplace pension payments. Employer pension funding is unchanged, and income tax relief is also preserved. Employers must record and report the total value of salary given up using the existing payroll software already in use by employers for reporting purposes, and HMRC has pledged to work with stakeholders as appropriate in practice. HMRC will issue further guidance ‘before April 2029’. The National Insurance Contributions (Employer Pensions Contributions) Bill 2026 will add a new subsection to section 4 of the Social Security Contributions and Benefits Act 1992, enabling regulations to deem sacrificed sums to be remuneration arising from employment for NICs purposes. See: Policy paper: salary sacrifice reform for pension contributions and National Insurance Contributions (Employer Pensions Contributions) Bill 2026. Since 6 April 2017, the income tax and National Insurance contributions (NICs)...
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PRACTICE NOTES
Optional Remuneration Arrangements (OpRA) in the UK: scope, application, valuation, transitional rules, excluded benefits, and the April 2029 £2,000 NICs limit on pension salary sacrifice
What are optional remuneration arrangements?
Optional Remuneration Arrangements (OpRAs) were brought in by the Finance Act 2017 and have applied from 6 April 2017. Transitional measures covered agreements already in place when the regime commenced. In essence, OpRA captures set-ups where employees either surrender a right to salary or opt to receive a benefit instead of cash pay. The overall effect was to remove the tax advantages that previously attached to such structures. HMRC notes the rules were introduced to ‘redress the advantages that use of these arrangements allowed’, so that employees do not pay less income tax and National Insurance contributions (NICs) than if the same value were delivered entirely as cash earnings. The regime applies for income tax purposes and when calculating the amount liable to NICs. It does not, however, attempt to change which class of NICs applies, meaning employee NICs may still not arise, as the majority of benefits within scope of the rules will give rise to a liability to Class...
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PRACTICE NOTES
Salary sacrifice: UK tax/NICs, OpRA, contractual validity, HMRC reporting, NMW/NLW and risks, plus April 2029 £2,000 NICs cap on pension salary exchange
FORTHCOMING CHANGE:
On 26 November 2025, within Budget 2025, the government confirmed that from April 2029, only the first £2,000 a year of pension contributions made under a salary sacrifice arrangement will be outside the scope of National Insurance contributions (NICs). Amounts given up through salary sacrifice above £2,000 annually will attract both employer and employee NICs, meaning any excess over £2,000 will be treated for NICs in the same way as other employee workplace pension payments. Employer contributions remain unchanged, and income tax relief is not affected. Employers must report the total salary forgone via existing payroll systems, and HMRC has pledged to liaise with stakeholders. Further guidance will be issued ‘before April 2029’. The National Insurance Contributions (Employer Pensions Contributions) Bill 2026 will add a new subsection to section 4 of the Social Security Contributions and Benefits Act 1992, enabling regulations to deem sacrificed sums as remuneration from employment for NICs purposes. See: Policy paper: salary sacrifice reform for pension contributions and National Insurance Contributions (Employer Pensions Contributions) Bill 2026.
What is salary sacrifice?
Salary sacrifice (also called ‘salary exchange’) is...
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PRACTICE NOTES
UK Salary Sacrifice and Optional Remuneration Arrangements: OpRA, NICs and 2029 pensions cap; cycle-to-work and employer-supported childcare
FORTHCOMING CHANGE:
Announced on 26 November 2025 within Budget 2025, from April 2029 only the first £2,000 a year of pension contributions made under a salary sacrifice arrangement will be exempt from National Insurance contributions (NICs). Employee contributions through salary sacrifice above £2,000 per year will incur both employer and employee NICs, meaning any amount over £2,000 will, for NICs, be treated like other employee workplace pension contributions. Employer contributions are unaffected, and income tax relief is unchanged.
Employers will be required to report the total salary given up via existing payroll software, and HMRC has committed to engage with stakeholders. HMRC will provide further guidance before April 2029.
The National Insurance Contributions (Employer Pensions Contributions) Bill 2026 will insert a new subsection into section 4 of the Social Security Contributions and Benefits Act 1992, enabling the government to make regulations so sacrificed sums are treated as remuneration from employment for NICs purposes. See: Policy paper: salary sacrifice reform for pension contributions and National Insurance Contributions (Employer Pensions Contributions) Bill 2026.
What is salary sacrifice?
Salary sacrifice (also known as ‘salary exchange’)...
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PRACTICE NOTES
UK salary sacrifice: tax, NICs and VAT (OpRA), pensions (2029 £2,000 NICs cap), benefits, corporation tax, DOTAS and compliance
FORTHCOMING CHANGE:
On 26 November 2025, within Budget 2025, it was confirmed that from April 2029 only the first £2,000 each tax year of pension saving via a salary sacrifice arrangement will be free from National Insurance contributions (NICs). Employee pension amounts exchanged above £2,000 annually will attract both employer and employee NICs, meaning the excess over £2,000 will, for NICs, be handled like standard employee workplace pension contributions. Employer pension funding is unchanged, and income tax relief also remains intact. Employers must report total salary foregone using current payroll systems, and HMRC has pledged to work with stakeholders. Further HMRC guidance will appear ‘before April 2029’. The National Insurance Contributions (Employer Pensions Contributions) Bill 2026 will add a new subsection to section 4 of the Social Security Contributions and Benefits Act 1992, empowering ministers to make regulations so sacrificed sums are treated as employment remuneration for NICs purposes. See: Policy paper: salary sacrifice reform for pension contributions and National Insurance Contributions (Employer Pensions Contributions) Bill 2026. Salary sacrifice (also known as ‘salary exchange’) is an arrangement in which...
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PRACTICE NOTES
UK taxation of internationally mobile employees’ share options: ITEPA 2003 Chapter 5, post‑2025 Overseas Workday Relief and remittance reforms, and PAYE/NICs compliance
Introduction and context
This Practice Note provides a summary of the taxation of internationally mobile employees in relation to securities options (Options) charged to tax within Chapter 5 of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). On 30 October 2024, as part of the Autumn Budget 2024 announcements, the Labour government confirmed that it would proceed with the former Conservative government’s plans to abolish the remittance basis of taxation and replace it with a residence‑based regime, scheduled to commence on 6 April 2025. These changes were enacted through Finance Act 2025 (FA 2025) and have also affected, in particular, the availability and operation of overseas workday relief. This Practice Note reflects the current position under the new tax regime; however, the previous regime is still relevant for Options granted before 6 April 2025, because any elements of the Options’ ‘relevant period’ (see discussion below—broadly, the vesting period) that occur before 6 April 2025 remain subject to certain aspects of the earlier rules. For information on the changes, see Practice Note: The abolition of the remittance basis of taxation from 2025–26 and Policy paper: Reforming the taxation of non‑UK domiciled individuals...
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PRECEDENTS
HMRC non‑statutory clearance request letter template: implemented salary sacrifice arrangements (UK tax and NICs), with pension salary sacrifice NICs cap from April 2029
FORTHCOMING CHANGE:
On 26 November 2025, as part of Budget 2025, it was confirmed that from April 2029, only the first £2,000 in each year of pension saving arranged via salary sacrifice will be exempt from National Insurance contributions (NICs). Any employee amounts channelled through salary sacrifice above £2,000 annually will attract both employer and employee NICs, meaning any sum beyond £2,000 will, for NICs, be handled in the same manner as other staff workplace pension payments. Employer contributions remain unchanged, and income tax relief is also preserved. Employers must report the value of salary surrendered using existing payroll systems, with HMRC pledging to consult stakeholders. HMRC intends to issue additional guidance ‘before April 2029’, ahead of the April 2029 start date...
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PRECEDENTS
Salary sacrifice implementation and employee acknowledgement letter template, including reference salary and UK NICs pension salary sacrifice reform from April 2029
FORTHCOMING CHANGE:
On 26 November 2025, within Budget 2025, it was confirmed that, from April 2029, only the first £2,000 each year of pension savings made under a salary sacrifice arrangement will escape National Insurance contributions (NICs). Any amount an employee sacrifices above £2,000 per annum will attract both employer and employee NICs, meaning the surplus over £2,000 will, for NICs, be handled in the same manner as other staff workplace pension contributions. Employer-paid contributions are not altered by this measure, and income tax relief continues as before, as announced in Budget 2025 officially...
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PRECEDENTS
Salary sacrifice—employee FAQs for UK schemes, including FA 2017‑permitted benefits and April 2029 NICs exemption cap on pension salary sacrifice
FORTHCOMING CHANGE:
On 26 November 2025, within Budget 2025, the government confirmed that from April 2029, only the first £2,000 per year of pension saving made under a salary sacrifice arrangement will be exempt from National Insurance contributions (NICs). Employee sums channelled through salary sacrifice above £2,000 a year will attract both employer and employee NICs, with the effect that any portion exceeding £2,000 will be treated for NICs in the same manner as other employee workplace pension contributions. Employer contributions remain unchanged, and income tax relief is unaffected. Employers will be required to report the total salary sacrificed through existing payroll software, and HMRC has pledged to engage with stakeholders across the sector. HMRC will issue further guidance ‘before April 2029’. The National Insurance Contributions (Employer Pensions Contributions) Bill 2026 will introduce a new subsection into section 4 of the Social Security Contributions and Benefits Act 1992, empowering the government to make regulations so that sacrificed amounts are treated as remuneration arising from employment for NICs purposes. See: Policy paper: salary sacrifice reform for pension contributions and National Insurance Contributions (Employer Pensions Contributions) Bill 2026...
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PRECEDENTS
Template employee acknowledgement and variation of employment terms to implement salary sacrifice benefits; includes April 2029 pension salary sacrifice NICs update
FORTHCOMING CHANGE:
On 26 November 2025, within Budget 2025, it was confirmed that from April 2029, only the first £2,000 per year of any pension payment made under a salary sacrifice arrangement will be exempt from National Insurance contributions (NICs). Employee sums put through salary sacrifice above £2,000 a year will attract both employer and employee NICs, so any amount over £2,000 will, for NICs, be treated in the same way as other employee workplace pension contributions. Employer contributions remain unchanged, and income tax relief is unaffected. Employers will be required to report the total amount of salary sacrificed via existing payroll software, with HMRC committing to engage with stakeholders...
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PRECEDENTS
Template employee letter confirming salary sacrifice (pensions, cycle-to-work, ultra-low emission cars) and contractual variation, with April 2029 NICs reforms note
FORTHCOMING CHANGE
On 26 November 2025, as part of Budget 2025, it was confirmed that from April 2029 only the first £2,000 per year of pension contributions made via a salary sacrifice arrangement will be exempt from National Insurance contributions (NICs). Any employee contributions sacrificed above £2,000 a year will attract both employer and employee NICs, meaning the portion exceeding £2,000 will, for NICs purposes, be handled in the same way as other employee workplace pension contributions. Employer contributions are unchanged, and income tax relief remains in place...
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PRECEDENTS
Template employer invitation letter to join salary sacrifice scheme for tax/NICs-advantaged benefits, with FAQs and consent; notes 2029 NICs changes for pension salary sacrifice
FORTHCOMING CHANGE:
On 26 November 2025, within Budget 2025, the government confirmed that, from April 2029 onwards, only the initial £2,000 per year in total of any pension payment under a salary sacrifice scheme arrangement will escape National Insurance contributions (NICs). Amounts employees sacrifice beyond £2,000 annually will attract both employer and employee NICs, meaning any sum over that limit will, for NICs purposes, be handled in the same way as standard employee workplace pension payments. Employer pension contributions are unchanged, and income tax relief also remains intact. Businesses must record the aggregate salary given up using their existing payroll software systems, and HMRC has pledged to consult and engage stakeholders, as required. Further HMRC guidance will be published ‘before April 2029’...
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CHECKLISTS
UK salary sacrifice implementation checklist post-2017 optional remuneration reforms: steps for employee opt-in, contract variation, payroll, HMRC clearance and P11D/payrolling reporting
FORTHCOMING CHANGE:
On 26 November 2025, within Budget 2025, the government confirmed that from April 2029, only the first £2,000 each tax year of a pension contribution made pursuant to a salary sacrifice arrangement will be free of National Insurance contributions (NICs). Any amount sacrificed by an employee above £2,000 a year will attract both employer and employee NICs, so the portion over £2,000 will, for NICs, be handled in line with standard employee workplace pension payments, meaning the excess is treated in the same way as other employee workplace pension contributions for NICs purposes. Employer contributions are unaffected, as is income tax relief. Employers will need to report the total amount of salary sacrificed through existing payroll software, with HMRC committing to engage with stakeholders. HMRC will publish further guidance ‘before April 2029’. The National Insurance Contributions (Employer Pensions Contributions) Bill 2026 will insert a new subsection into section 4 of the Social Security Contributions and Benefits Act 1992 that empowers the government to make regulations providing for sacrificed amounts to be treated as remuneration derived from employment for NICs purposes. See: Policy paper: salary sacrifice reform for pension contributions and National Insurance Contributions (Employer Pensions Contributions) Bill 2026...
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