Trade union attacks Brown over pensions tax
Pressure is mounting on chancellor Gordon Brown to scrap the £5bn stealth tax levied annually on occupational pension schemes.
The latest figure to attack Brown over the tax is Amicus general secretary Ken Jackson, who warned of a crisis with ‘devastating repercussions for pensions’, writing for today’s FT.
Jackson chief said the controversial accounting standard FRS 17 and Brown’s removal in 1998 of a tax credit known as advance corporation tax cost the country’s pension funds around £5bn a year.
He said FRS 17, which forces pension liabilities to be accounted for on the balance sheet, was the ‘last straw’ but said changes to dividend tax credit had ‘started the rot’.
His protest comes a day after the policy, was attacked by Labour Pensions minister Frank Field.
Field said the inability of pension funds to claim tax relief on dividends must be reversed in order to shore up company schemes, as others companies close schemes to new employees.