SIPP tax benefits

IMG Artists uses a tax-efficient method to make pension contributions from your earnings called Salary Exchange.

What is Salary Exchange?

Salary Exchange is a way of saving money by reducing your National Insurance Contributions (NICs). Instead of making pension contributions from your net pay (after tax) you agree to reduce your gross salary by the amount you'd like to pay into your pension. IMG Artists then pays an amount equivalent to the reduction into your pension along with the normal IMG Artists payment.

For more company-specific Salary Exchange information please read the company FAQs

How do I benefit?

• No employee NIC payable on your contribution
  Your Salary Exchange contribution will be made as an employer contribution, and employer contributions are not subject to NIC or income tax.
• No income tax payable on your contribution
  You will immediately save Income Tax at the highest rate you pay, avoiding the need to reclaim any higher or additional rate tax relief from HM Revenue and Customs (HMRC).

How much can I contribute to my pension?

Does the reduction in salary have any knock-on effects?

There may be knock-on effects when using Salary Exchange.

This list is not intended to be exhaustive, but please consider the following issues before taking up Salary Exchange. If you could be adversely affected you should seek financial advice. Please also read our Salary Exchange Factsheet for more information.

State benefits »

State benefits will be based on your revised salary. This may include Statutory Maternity Pay, Statutory Redundancy Pay, Statutory Sick Pay, Working Tax Credit and Child Tax Credit.

Earnings below HMRC thresholds »

If you earn below the Primary Threshold you will not make any NIC savings by using Salary Exchange. If your total income is below your personal allowance (the level above which Income Tax is payable) you will not benefit from tax relief. If you pay tax at Scottish starter rate, you will not benefit from 20% basic rate tax relief and will only receive 19% tax relief using salary sacrifice.

Student loans »

Repayments may reduce or stop if your salary falls below the repayment threshold, so it will take longer to repay your loan.

Other benefits »

A reduction in salary could affect mortgage and credit applications and the maximum cover available on privately obtained life and health insurance policies.

Tax relief »

If you are a higher or additional rate taxpayer and currently reclaim tax relief on pension contributions via a method other than Self-Assessment, we would recommend you contact HM Revenue & Customs and notify them that you will be participating in a Salary Exchange arrangement and reclaiming tax relief through payroll. This will help to avoid underpaying tax in this respect.