BusinessCompany NewsBrown urged to scrap stealth tax on pensions

Brown urged to scrap stealth tax on pensions

Pressure is mounting on chancellor Gordon Brown to reverse the 'stealth tax' levied on pension funds, which he introduced four years ago, to ease pressure on company final salary pension schemes.

The demands, made while Parliament has been on a brief recess, follow the decisions by Ernst & Young and others to close their final salary schemes, blamed on the removal of the £5bn a year tax relief.

Former Labour Pensions minister Frank Field warned the loss of the right 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 following the E&Y example.

The call comes after a survey released last week by KPMG showed that many employees faced the prospect of a ‘lean retirement’ if they continued to make low contributions to their defined contribution schemes, the replacement for final salary schemes.

According to KPMG, pension income under defined contribution schemes could be as much as one-third lower than under final salary schemes.

Related Articles

M&S business rate liabilities based on £570m rateable value

Company News M&S business rate liabilities based on £570m rateable value

4m Emma Smith, Managing Editor
BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

8m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

12m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

1y Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

1y Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

1y Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

1y Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

1y Emma Smith, Managing Editor