Pensions relief restriction plans must be halted, says CIoT

Advisers are disappointed that the government is pushing on with introducing restrictions on pensions tax relief for higher earners from 6 April.

The government had been warned that the changes, which would see tax relief tapered from 50% to 20% for those earning between £150,000 to £180,000, would create an unnecessary administrative burden.

“The government’s proposed method of restricting tax relief will cause disproportionate complexity and an increase in the costs for employers, pensions scheme and the pensions industry as a whole," said Colin Ben-Nathan, chairman of the CIoT’s employment taxes sub-committee.

“Even the government’s own figures indicate that the compliance cost on business will be in the region of £1bn in the scheme’s first year alone."

The CIoT wants the government to hold fire and enter into another consultation on its plans. Its alternative proposal would be to limit the amount that people can place into registered pension schemes.

Further reading:

Read the Treasury's documentation on its plans

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Barclays accused of using pension savings to fund bonus tax