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Treasury moots corp benefits NI breaks
21st February 2011
Corporate ISAs are on the road to netting employers tax breaks under government plans currently being discussed.
Meanwhile, Legal & General’s (L&G) corporate cash ISA goes live this week, with three clients totalling 15,000 staff signed up for the start of next year, and a US blue chip pledging to make the product available to its 20,000 UK staff from January 1, 2012.
PW’s sister title Pensions Management, last week exclusively revealed the Treasury has been asking the rapidly growing list of corporate ISA providers to explain the products and how they are structured, in a series of high level meetings.
And PW now understands the conversations are the start of a process to develop policy to incentivise the products, with national insurance breaks mooted for participating companies.
The discussions have been broadened from providers to firms with staff ISAs, including Barratt Homes.
L&G, Hargreaves Lansdown, WEALTH at work and Fidelity have all been asked to meet with Number 11 over the past four months.
Julian Webb, head of UK defined contribution at Fidelity, claimed he is expecting a visit from the Treasury in the next few weeks. He said: “We weren’t on the Treasury’s radar to begin with, but following our ISA announcement [in February] they have reached out to us.
“As I understand it, it’s just a general conversation at this stage; they are interested in why and how we’ve [developed the ISA] and what level of interest we’re expecting in it.”
Webb added the Treasury appeared to be keen to be seen as being aware of developments in the corporate wrap space/
L&G’s (PW: 01/11/10) launch sits on the insurer’s WorkSave employee benefits platform, and is believed to have been taken up by at least two FTSE 100 firms.
HBOS will provide the cash account, with 1% interest on deposits, tracking the Bank of England base rate.
Tony Filbin, L&G’s managing director of workplace savings, said: “The WorkSave cash ISA should appeal to all members of staff and can play an important role in kick starting long-term saving for younger employees.”
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