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Pension tax relief ‘under threat’ in forthcoming Autumn Statement

Tax relief on the pension contributions of high earners could be under threat in the forthcoming Autumn Statement, some economists have warned.

As the 2012 Autumn Statement draws nearer, speculation is rising that Chancellor George Osborne could reduce the tax-exempt threshold for pension contributions to £40,000, or even £30,000.

The maximum annual limit for tax-free pension contributions was previously cut from £255,000 to £50,000, in the 2010 Emergency Budget.

Reducing the cap on contributions to £40,000 would save the Government an estimated £600m a year.

However, experts have warned that such a measure would affect not only higher rate taxpayers, but also those on final salary schemes.

The speculation follows the Coalition’s recent rejection of proposals by the Liberal Democrats to introduce new council tax bands for high value properties.

The Autumn Statement will take place on Wednesday 5 December. Be sure to visit our website for the latest announcements that could affect you and your business.

 

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