The ICAEW Tax Faculty has warned that compliance and information obligations arising under revised proposals for the restriction of pensions tax relief are ‘likely to make many more employers at least in the private sector consider closing their defined benefit schemes to future contributions even for current employees’.
A lot more people will be affected by the revised proposals set out in a consultation paper in July (see www.lexisurl.com/6TUlg) than under the previous administration’s ‘high income excess relief charge’. They will have ‘the burden of considering whether they are affected’.
The Faculty added: ‘The annual allowance should not be reduced to such an extent that tax on excess contributions is commonly payable because the inability to plan on the basis of expected tax relief will lead to perception that saving into a pension scheme is too risky and many will not invest into...
