Pensions proposals welcomed by CIOT

Posted by Sarah Glenister

Government proposals to change legislation on pensions tax relief has been welcomed by one organisation.

The Chartered Institute of Taxation (CIOT) said the plans were an improvement on those of the previous administration, saying the Labour's moves would make the system more complex.

A discussion document released by the government said the annual allowance on long-term savings should be set between £30,000 and £45,000.

This will have an impact on all individuals rather than just those earning over £150,000 per year, chair of the organisation's employment taxes sub-committee reported.

 

However, he welcomed its simplicity and the reduction in administrative burdens it places on employers and those in the retirement industry compared with the previous government's plan.

"Our view was and remains that lowering the annual allowance can achieve the government's policy goals whilst also maintaining certainty and fairness," he stated.

Although the body still believes there are problems with the legislation, CIOT tax policy director John Whiting described these as "soluble".

This comes after the Association of British Insurers responded to the discussion document, arguing the annual allowance should be set at £45,000.