God i hate NEST its always such a struggle. Anyway this month it is saying an employee is not eligible for tax relief so it has grossed up the contributions. i have no idea why it had done this anybody got an idea why it might have happened. Nick
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Could you explain with figures?
Grossed up suggests a "relief at source" scheme. Which is what I thought NEST was. And means they have received basic rate relief.
You've not accidentally ticked something to say its salary sacrifice so no pension tax relief would be due to the employee as it's actually an employer contribution??
I take it you've checked that all the tickboxes are the same for this rogue employee as the rest of the staff ?
I find all AE schemes a nightmare when something goes wrong when I innocently try to send data to them.
At least the staff who speak to you when you get through are a lot more knowledgeable than HMRC people, but that's a very small benefit to bear in mind.
As an aside, I never understand why employers run net pay schemes for pensions.
Extra bills for NI for employee and employer plus higher rate tax payers lose out on valuable relief unless filing a tax return.
The only plus is a slightly higher gross pay for borrowing purposes.
The one advantage is that you can use NEST, which avoids set-up formalities and management fees that come with other schemes.
I presume your dislike is actually of RAS (relief at source) schemes, which is what NEST operates? [Net Pay Arrangement method is not an option with NEST].
FWIW an advantage of RAS is for lower paid employees who may not even be paying tax on their employment earnings but will, nevertheless, have 'tax relief' added to their pension contributions by the scheme administrator. Money for nothing!
And I don't understand your comment about "extra bills for NI", since pension contributions (under NPA) may well reduce taxable pay - but has no impact on NIable pay in terms of the EE's NICs.