CIOT awknowledges changes to pension contributions relief proposals
The Chartered Institute of Taxation (CIOT) is pleased to note that the Government has announced changes to the new rules restricting tax relief for pension contributions. This answers some of the CIOT’s concerns.
The Finance Bill proposals restrict tax relief for pension contributions made by those earning over £150,000; the amendments, if agreed by Parliament, will permit many taxpayers who currently pay premiums on an annual or irregular basis to benefit from higher rate tax relief on contributions of up to £30,000, in line with those who make more regular contributions.
Andrew Hubbard, CIOT President, said: “The CIOT highlighted the unfairness in the original proposals, which favoured those who paid, or whose employer paid, regular monthly or quarterly pension contributions, while disadvantaging those who made less regular contributions.”
The self-employed typically make annual contributions only once their income for the year has been determined.
The CIOT also welcomes the current constructive dialogue with the Government on regulations to permit some taxpayers who switch scheme providers to continue to obtain relief. The Finance Bill provisions limit relief for those higher paid earners who change their scheme provider, even where that is for financial rather than tax reasons.
Andrew Hubbard added: “We welcome the fact that the Government has listened to our concerns. We had hoped that the changes would have gone further, but we can appreciate that the current adverse financial conditions have necessitated some tough decisions.”
The CIOT looks forward to examining the detail of the changes and hopes that there may be opportunities for further changes if the rules do not work as intended.
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