The full scale of the tax crackdown on the rich became clear yesterday as details emerged of a fresh Labour raid on pensions. Hidden in the small print of Alistair Darling’s Budget are plans to tax anyone earning more than £150,000 on payments their employer makes into their company pension. The measure sets a precedent in the taxation of pensions and would give the Treasury an extra £2.9 billion a year — equivalent to almost a penny on the basic rate of income tax. It has escaped wider notice because the full effect will not be felt for three years and, according to the Treasury, is to be put out to consultation. However, Mr Darling has included the money it would raise in his calculations and abandoning the plan would leave a hole in government finances. Pension experts warned that the new regime — taxing pension contributions as if they were a benefit in kind — could finish off the few remaining final-salary schemes. The changes mean that someone earning £230,000 a year who contributes 6 per cent of income to a final salary pension scheme will be about £16,000 a year worse off. The average cost to the 291,000 earning more than £150,000 is £10,650 a year. The revelation will be a further blow to high earners, who already face a new 50 per cent rate of income tax from next year, reduced tax relief on their own pension contributions and the removal of their personal allowance — the amount that they can earn without paying tax. Mr Darling’s decision to bring in the 50 per cent top rate of tax received broad approval from voters in the first post-Budget opinion poll. Fifty-seven per cent of respondents had a positive view, with 22 per cent negative, according to the Populus poll. The survey also shows Gordon Brown and Mr Darling moving ahead of David Cameron and George Osborne as the better team to manage the economy, by 38 to 35 per cent. Current company pension rules allow both employees and employers to claim tax relief on their contributions. From April 2017, those who earn more than £150,000 a year will have their tax relief reduced incrementally from 40 per cent to just 20 per cent if they earn more than £180,000. In addition, footnotes in the Budget reveal that high earners will also become liable for a benefit-in-kind tax charge for the contributions that employers make on their behalf. This will be levied at a rate of 20 per cent. The move is the latest in a series of controversial decisions by the Labour Government affecting pensions. Gordon Brown’s decision in 1997 to remove tax relief from dividends received by pension funds has been blamed for undermining the value of private pensions. The small print of Wednesday’s Budget also revealed a 42.5 per cent tax rate on share dividends for those with incomes above £150,000. Tom McPhail, of the financial adviser Hargreaves Lansdown, said: “Just about the only reason that company directors have been willing to tolerate the continued burden on their business of funding a final-salary scheme has been one of self-interest: they get to share in the benefits of the scheme. The Government proposes to remove that motivation. Given that this measure is going to cost senior managers an average of £10,600 a year, it is a fair bet that many will just shut their final-salary scheme down.” The Treasury said: “The Government clearly set out its expectations of the revenue from this meas，英语毕业论文，英语论文范文 |
