A Bill to Make provision to amend section 4 of the Social Security Contributions and Benefits Act 1992, and section 4 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, so that amounts of salary sacrificed for employer pensions contributions pursuant to optional remuneration arrangements are liable to national insurance contributions.
Second reading - the general debate on all aspects of the bill - took place on 4 February. What happens next? Committee stage - line by line examination of the bill – is scheduled for 24 February.
House of Commons
Rachel ReevesLabour (Co-op)
26 March 2026
May contain errors — check source documents for definitive information.
The bill would tax, for National Insurance purposes, the amount employees forego when salary‑sacrificing employer pension contributions, but only up to an annual cap. The initial cap is £2,000 a year from 2029‑30, with regulations to set the details and handle any excess. Lords amendments proposing changes such as a higher cap and extra protections for SMEs and charities have been debated, but the Commons has disagreed with those amendments; the legislation is currently in the Lords to decide how to proceed with those Commons changes.
The bill has passed its Commons stages and was sent to the Lords with amendments. The Lords proposed a suite of changes (notably on the cap level, exemptions, and scrutiny). The Commons then voted to disagree with those Lords amendments, so the bill is now back with the Lords to consider the Commons’ position and decide whether to accept or reject those changes. The current formal stage is the Lords’ consideration of Commons amendments and/or reasons.
In the Commons, MPs overwhelmingly supported the main bill at several readings, but in late March 2026 they voted to disagree with multiple Lords amendments, indicating a clash over details such as cap levels, exemptions, and parliamentary scrutiny. The main voided amendments included higher caps, carry‑forward provisions, and broader exemptions; the government and its allies pushed to keep the bill in its Commons form, while other parties and Lords pressed for fuller impact assessments and safeguards.
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Showing agreed, defeated, and withdrawn amendments.
Based on 9 recorded votes • Sorted by % Aye
Consideration of Commons amendments/reasons on the bill took place in the House of Lords on 25 March.
What happens next?
Both Houses have agreed on the text of the bill which now waits for the final stage of Royal Assent when the bill becomes an Act of Parliament (law).
A date for Royal Assent is yet to be scheduled.
This Lords publication lists 12 proposed amendments to the National Insurance Contributions (Employer Pensions Contributions) Bill, including changes to tax thresholds (adding reference to higher/additional rate), raising the £2,000 limit to £5,000, and creating exemptions for SMEs and charities, plus new economic and behavioural impact assessments for groups such as basic-rate taxpayers, student loan repayments, SMEs/charities, and Northern Ireland. The Commons disagree these amendments, arguing they would alter financial arrangements; the document sets out motions for the Lords to either not insist or to propose in‑lieu amendments to require those impact assessments.
The Lords proposed a series of amendments to the National Insurance Contributions (Employer Pensions Contributions) Bill, including applying the higher/additional rate of tax to contributions, special rules for excess contributions under student loan regulations, raising the contributions limit from £2,000 to £5,000, and exemptions for certain SMEs and charities/social enterprises, plus other drafting changes. The Commons disagreed with all of these Lords amendments, arguing they would alter the financial arrangements and offering no further reasons.
