Reclaiming tax on pension contributions!

MikeSuzuki

See the Daily Telegraph today on the new pensions consultation.

I'd read this is you are making tax-relieved pensions savings. Scary stuff, looks like a legalised theft on a sizeable scale is being cooked up.

Paul_Herring

MikeSuzuki wrote: »

See the Daily Telegraph today on the new pensions consultation.

I'd read this is you are making tax-relieved pensions savings. Scary stuff, looks like a legalised theft on a sizeable scale is being cooked up.

Which one? I found three:

http://www.telegraph.co.uk/finance/personalfinance/11760373/Pension-savers-are-under-attack-like-never-before.html

The Government’s pensions reform consultation document bears the innocent title “Strengthening the Incentive To Save: a consultation on pensions tax relief”.

Don’t be misled. This exercise isn’t primarily about getting the public to save more. The principal objective here is to save money for the Exchequer.

http://www.telegraph.co.uk/finance/personalfinance/11760370/Former-pensions-minister-the-future-of-tax-relief.html

The much bigger prize would be a reform that affected the millions of people who were already saving into a pension.
My suspicion is that this is what the Chancellor is really interested in, but a Green Paper that specifically talked about taking away tax relief from those who already received it would have created a storm.

http://www.telegraph.co.uk/finance/personalfinance/pensions/11760564/The-biggest-pensions-shake-up-in-a-century-how-will-it-affect-you.html

Savers will be asked to give up billions of pounds of tax relief they have received on their retirement funds under a tax grab being prepared by the Government, the former minister for pensions predicts today.
Steve Webb, a prominent member of the coalition government until May, warns that people who have been “saving for decades” are the ultimate target of an inquiry announced two weeks ago.

kidmugsy

MikeSuzuki wrote: »

Scary stuff, looks like a legalised theft on a sizeable scale is being cooked up.

Not remotely likely: Osborne wants to be the next Conservative Leader and win the next two General Elections. Contrast the mild tones of Steve Webb's remarks and the excitable tone of the journalists'.

MikeSuzuki

Paul,
It was the last of the 3 links you posted.
Kid,
I do hope you're right. I did reflect afterwards it was Webb, not 'an unnamed source at the Treasury'.
I do think that abolishing the tax free commencement lump sum is on the cards - just a question of when.
That Tories do things that Tory voters like is a nice idea, but patently not true in the case of the nearterm intent to curtail AR tax payers' pension savings tax relief. However, its hard to argue that they should get it on unlimited contributions (and I don't) but I don't understand why they cannot have the same benefit as, say, someone on £150K pa gross salary, by way of tax relief (and not just the £10K from next year).
Cheers, Mike

kidmugsy

MikeSuzuki wrote: »

That Tories do things that Tory voters like is a nice idea, but patently not true in the case of the nearterm intent to curtail AR tax payers' pension savings tax relief.

Elections are about numbers. There are few AR payers; there are many pensions savers.

choccielover

zyper wrote: »

Thanks guys for all your contributions.Very useful & helpful. If the 4 year limit quoted is the case then I'm afraid I am scre*d as I've passed it n this case. I will chase it up regardless with HMRC as it will be worth the hassle if I can still claim..though I doubt it:(

I missed the deadline for 2009/10 and asked the question if I could back claim when I called then about another matter, there was no budging.

Chocs

zagfles

MikeSuzuki wrote: »

See the Daily Telegraph today on the new pensions consultation.

I'd read this is you are making tax-relieved pensions savings. Scary stuff, looks like a legalised theft on a sizeable scale is being cooked up.

What it seems to be saying is that people might be given the option to move their pension to a "PISA" type arrangement - paying tax at the point of transfer rather that paying tax when they draw the pension. Not that it'll be compulsory. It would help the govt with the current deficit as they'd give people the option to pay tax now instead of later.

But the article is very confusing - it seems to have mixed up two different idea, a flat rate tax relief of around 33%, with an ISA type arrangement (taxed income in, no tax on the way out). Obviously if you get 33% tax relief going in, the pension isn't going to be tax free on the way out!

I would imagine a "PISA" type arrangement would only have tax "relief", or a govt contribution, of about 5-10% or so, as an incentive for tying the money up till 55, a similar sort of value to the TFLS.

neilvw

zagfles wrote: »

But the article is very confusing - it seems to have mixed up two different idea, a flat rate tax relief of around 33%, with an ISA type arrangement (taxed income in, no tax on the way out). Obviously if you get 33% tax relief going in, the pension isn't going to be tax free on the way out!

Yes, and that's not all that's confusing:

Under the current system you pay £120 into a pension and get £30 paid in by the Government, making a gross contribution of £150. As a higher rate tax payer, you get a further £50 offset against your tax bill via your tax return.

£30, surely?

Paul_Herring

neilvw wrote: »

£30, surely?

Indeed. Dunno where they got £50 from...

redux

zyper wrote: »

Thanks guys for all your contributions.Very useful & helpful. If the 4 year limit quoted is the case then I'm afraid I am scre*d as I've passed it n this case. I will chase it up regardless with HMRC as it will be worth the hassle if I can still claim..though I doubt it:(

It would have changed if it's now 4. It used to be 6, though I did once surprise my accountant by getting back money from 9 years earlier.

That was possible because I'd asked about it, and they did nothing, then I chased it up years later, when they made a mistake which reminded me.