A Flat Rate of Tax Relief?

triplea35

https://www.bestinvest.co.uk/news/autumn-budget-pension-tax-relief-cut

Having just read this article just wondering what people's views are on a possible flat rate of tax relief, possibly 30%. Is the article pure speculation?

As a basic rate tax payer it seems fair to me. I may delay making this years lump sum contribution.

dunstonh

Everything is speculation at this stage. It is that time of year when everyone guesses and every think tank publishes ideas and the media runs with what may be in the budget. You get articles like "10 things you will see in the budget" and post budget, you saw none of them.

Personally, I do not see anything radical as
1) Brexit is dominating time and a finance act with this level of change is not something quick or cheap to implement.
2) Low majority with Labour automatically voting against anything.

kidmugsy

triplea35 wrote: »

As a basic rate tax payer it seems fair to me. I may delay making this years lump sum contribution.

As a basic rate tax payer it seems unfair to me. The present system where everyone gets to pay in a bit of their gross earnings seems fairer. Except that I see no justification for salary sacrifice.

londoninvestor

dunstonh wrote: »

Everything is speculation at this stage. It is that time of year when everyone guesses and every think tank publishes ideas and the media runs with what may be in the budget. You get articles like "10 things you will see in the budget" and post budget, you saw none of them.

And of course, it suits BestInvest pretty well to promote speculation that might cause you to hurry to contribute into your SIPP with them.

Not that they are worse than their competitors in this regard...

greenglide

Surely any changes such as a single flat rate of tax relief would be complex to implement, both by HMRC and pension providers?


Surely such a change could not be implemented in time for April 2019 and would struggle to get done in time for April 2020?

londoninvestor

greenglide wrote: »

Surely any changes such as a single flat rate of tax relief would be complex to implement, both by HMRC and pension providers?


Surely such a change could not be implemented in time for April 2019 and would struggle to get done in time for April 2020?

I'd say so, because it's not just changing the rate from X% to Y%, in the way that it sometimes seems to be superficially described as.

It's breaking the model that says a contribution deducted from salary is removed from any subsequent tax calculation - and this would be a big impact on PAYE employers.

ColdIron

It's a perennial speculation just before budgets for as long as I can remember, along with lowering the annual allowance or lifetime allowance (which does happen) and even the PCLS. Tax relief on pensions is regarded as a low hanging juicy fruit by Chancellors of all stripes. My belief is that it will happen one day, just not yet, so I would make hay while the sun shines

Snakey

Budget is 26 October, if anybody hadn't heard yet.

They are doing OK this year I think in terms of the tax take and borrowing being at or better than forecast, so we might be alright.

The only thing I care about is getting confirmation of the timescale for raising the private pension access age. Too much to hope that they've forgotten all about it?

cobson

Snakey wrote: »

Budget is 26 October, if anybody hadn't heard yet.

29th October

ffacoffipawb

Can't see how this will work regarding employer contributions to defined benefit schemes as they should be allowed for in the same way as salary sacrifice because both would get around this change if they werent changed in some way.

Snakey

cobson wrote: »

29th October

That's what I meant.