There is fervent speculation amongst the financial press that the Chancellor will cut the rate of tax relief for higher and additional rate taxpayers from 16 March 2016.
The cuts may be phased in over a period of time or could take immediate effect from 16 March 2016.
Some of the rumours include :
- Removing tax relief for higher (40%) and additional (45%) taxpayers ; and
- Introducing a new flat rate for all pension contributions, which may benefit basic rate taxpayers but penalise higher rate tax and additional tax payers ; and
- Paying pension contributions from taxable income but receiving the pensions tax free, which is the opposite to the current system and similar to the way ISAs work
This is all speculation at this stage, the Chancellor may well leave the current system unchanged.
However, you may want to act now and if you have any queries about “topping up” your pensions prior to the 16 March within the available limits, then please let us know by calling 0845 177 5500, or contacting us on-line.