Newsletter

Restricted tax relief on pension contributions

Pension contributions made by an individual are usually paid net of basic rate tax. Where the individual is a higher rate taxpayer further relief is due which significantly reduces the net cost of the contribution.

The government has announced its intention to restrict tax relief on pension savings with effect from 6 April 2011 for people with taxable income of £150,000 or more. The relief will be tapered down until it is 20%.

Legislation will be introduced to prevent those potentially affected by the new rules from seeking to forestall this change by increasing their pension savings in excess of their normal regular pattern, prior to that restriction taking effect.

The forestalling measures will apply to individuals with incomes of £150,000 or more who, from Budget Day, change:

  • their normal pattern of regular pension contributions, or
  • the normal way in which their pension benefits are accrued, and
  • their total pension contributions or benefits accrued exceed £20,000 a year.

Reacting to the Chancellor’s Budget speech, Richard Lambert, CBI Director-General, said:

‘Changing the higher-rate tax relief on pensions weakens incentives to save for retirement and is yet another change to a system which really needs stability.’

Internet link: HMRC pensions changes



Our other services...

Financial Accounts Financial Accounts

We can help with the preparation of accounts for all types of business. Whether you are a Sole Trader, Partnership, Limited Company, Limited Liability Partnership or a Charity, AGP has the expertise to deal with you. We help you fulfil all your obligations with HMRC, Companies House and any other regulatory body that you are required to report to.

Audit Audit

An audit provides a high level of independent assurance of the financial position and results of an organisation. This gives shareholders confidence that the reported performance of the business is accurate as well as providing external users with certainty that the accounts show a true and fair view. An audit lends credence to the company accounts in a number of ways.

Tax Planning Tax Planning

It is important to ensure your tax planning reflects any changes to your circumstances which is why we work very closely with all our personal clients. AGP are trusted to manage tax efficiently. Sometimes just a simple review of your personal tax circumstances can reveal significant tax saving opportunities which can be realised quickly and at minimal cost..

Payroll Services Payroll Services

AGP can become your own part-time Payroll Manager. An expert who knows the complexity of the relevant legislation inside out and for a fraction of the cost of an internal manager. Why not outsource this obligation and spend the time saved doing what you do best, running your business?

Corporate Taxation Corporate Taxation

Corporation tax can be a huge outgoing for your company if it is not managed correctly and planned appropriately. You can trust AGP to employ a holistic approach to your tax planning whether you are a medium sized SME, an international organisation or a small owner-operator.

Management Accounts Management Accounts

Management accounts allow business owners to exert a far greater degree of control over their business, recognising and addressing problems and identifying opportunities soon after they arise.

Bookkeeping & VAT Bookkeeping & VAT

When running a business, priorities are often focused on the operational side of your business. Bookkeeping & administration can often be put off until it becomes quite a major task. By taking advantage of our bookkeeping service, we can take this problem away so you can get on with running your business while we manage your accounting books.

Company Formation Company Formation

We take away the hassle. Whether starting a new business or restructuring an existing one, our extensive knowledge of company formation means we can advise you on the merits and possible pitfalls of incorporation.

Contractor Accounts Contractor Accounts

We have a wealth of experience in the contractor market and as a result there are not many firms of Chartered Accountants that can claim they know the contractor industry as well as AGP. This leads to a number of benefits.