Pensions tax boost for 45pc taxpayers worth 'hundreds of millions of pounds'

Pensions tax boost for 45pc taxpayers worth 'hundreds of millions of pounds'Pensions tax boost for 45pc taxpayers worth 'hundreds of millions of pounds'

Public and private sector workers on top salary could benefit from more tax relief on their pension contributions under rumored reforms to tackle a staffing crisis in the NHS. Sir Steve Webb, a former pensions minister now policy director at Royal London, said the mooted changes would hand “hundreds of millions in tax relief to tens of thousands of people”. The Treasury is understood to be looking at raising the point at which restrictions to the pensions annual allowance kick in by £40,000 to £150,000, The Times reported today. Such reforms would be aimed at preventing doctors receiving huge tax bills, which are leading them to turn down extra shifts. However, as the rules also affect private sector workers and others in the public sector, tweaking them could mean tens of thousands of higher earners, not just doctors, also getting a tax windfall. Experts have said the changes would mostly affect those paying the top rate of income tax: 45pc. It comes as the number of pension savers paying tax after breaching the annual allowance limit reached a record high, according to the most recent figures from HM Revenue & Customs. Some £812m of pension contributions were made in excess of the allowance in the 2017-18 tax year, up from £578m in 2016-17. Experts said at the time that the big increase was likely caused by the introduction of the "tapered" annual allowance in April 2017.
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