What are the options for employers and employees who are hit by next year’s tapered annual allowance and reduced lifetime allowance?
A Freedom of Information request by Suffolk Life has revealed that in 2013/14 HMRC collected £94.2m in lifetime allowance charges, down about 4% from £98.0m in the previous year. Alas, there is no corresponding information for the annual allowance charge. However, it is probably a smaller figure as input is easier to control than pension fund growth/output. With the lifetime allowance destined to drop again to £1m next April along with the introduction of tapering of the annual allowance, the Exchequer could be looking forward to more inflow from pension allowance tax charges. But are these taxes worth paying if other benefits accrue?
If all income of your income is likely to be over £110,000 in 2016/17 onwards you need to start planning now. Let us help you do this.