There will be two budgets in 2017 and then from 2018 going forward, we will have a Spring Statement and and Autumn Budget.
The latest Statement did not appear to contain any major surprises but there were a number of tax-related announcements.
- Insurance premium tax becomes even more onerous from June 2017, rising to 12%
- The commitment regarding the lowering of Corporation Tax was renewed. This will be lowered gradually to 17% by 2020.
- There were further anti-avoidance measures including a new legal requirement to correct a past failure to pay UK tax on offshore assets.
- For those people who are already taking income from their pension and still wish to contribute (and benefit from tax-relief) there is a new lower limit of £4000 per annum from April 2017, down from £10,000.
This money purchase pension allowance (MPPA) applies to those who have flexibly accessed their pension. It is however important to remember that this limit only applies to people who have accessed the "income" element of their pension pot. If someone has simply taken part or all of their tax-free cash (but no income) the MPPA is not triggered.
- The tax and National Insurance advantages of many salary sacrifice schemes is being removed from April 2017.
Importantly however there are exemptions to this, the main one being pension contributions.
In the right circumstances salary sacrifice remains a highly efficient method for employees to boost their pension contributions.
For anyone wishing to look at this element in more depth or indeed any other of the announcements, our adviser team are on hand to assist.
The above is provided for information purposes only and we recommend that professional independent advice is taken prior to making any decisions or taking any action.