FT - Tories to raid tax relief pensions

lisyloo

Personally I think it would be madness to make pensions unattractive.
the ole point is to tie it up for retirement.
plenty of people would access it beforehand if it wasn’t tied up so it would be an own goal.
that doesn’t mean that we can rule it out, for example ir35 looks like an own goal, trying to raise more tax but jobs being offshores as a result

marlot

... ir35 looks like an own goal, trying to raise more tax but jobs being offshores as a result

If contractors had been a bit less greedy, then nothing needed to have changed.  As a civil servant, I was often in the coffee queue and the contractors would be asking for receipts so they could offset their drink against tax.  And they'd be openly talking about employing their spouse to "do the books", giving themselves dodgy loans, rocking up in £80k cars etc.

I'm not convinced that the IR35 legislation is a great solution - but I'm not surprised that there was a backlash.

lisyloo

There have been 7 suicides as a result of the loan charge (not ir35).
i don’t disagree that changes were needed but I don’t think the way it’s been done is working.
for example it’s resulting in more jobs being offshored which isn’t going to raise more tax.
wrecking industries isn’t the way to sort out rogue individuals (and we certainly aren’t all like that) but we’ll see what effects it has.

kinger101

Where's your evidence for offshoring?  Seem premature as the latest changes are due April 2020.

lisyloo

Some companies have already made determinations/plans in preparation for April 2020 which isn’t many weeks away

Reed, hays, manpower and Harvey Nash have said this is happening in a letter to the chancellor 
https://www.peoplemanagement.co.uk/news/articles/non-compliance-will-thrive-after-ir35-changes
they are certainly VIs but are they lying to the chancellor?

kinger101

They may not be lying, but at best, it seems anecdotal.  It doesn't follow the the this will lead to a net loss in revenues raised by HMRC.  It seems that much of the stuff in that article is the intended consequence of the legislation  - i.e. not hiring contractors when the relationship is in fact one of employer/employee.   

Gary1984

So sounds like the budget may be delayed beyond the already delayed date of 11 March. If it's later in March I just don't see how there can be a major overhaul of the pension system with only a couple of weeks notice. It would be chaos. I find it hard to see anything other than a few tweaks this time round. Hopefully...

prowla

The Tories like to tax people.

Thrugelmir

Gary1984 said:

So sounds like the budget may be delayed beyond the already delayed date of 11 March. If it's later in March I just don't see how there can be a major overhaul of the pension system with only a couple of weeks notice. It would be chaos. I find it hard to see anything other than a few tweaks this time round. Hopefully...

Budgets are far more than the headlines that hit the media. More often or not the devil is in the detail. Longer term proposals receiving scant consideration. 

NedS

Thrugelmir said:

Gary1984 said:

So sounds like the budget may be delayed beyond the already delayed date of 11 March. If it's later in March I just don't see how there can be a major overhaul of the pension system with only a couple of weeks notice. It would be chaos. I find it hard to see anything other than a few tweaks this time round. Hopefully...

Budgets are far more than the headlines that hit the media. More often or not the devil is in the detail. Longer term proposals receiving scant consideration. 

I agree - perfect time to introduce changes to be brought in 12 months down the line, April 2021.