EnglishHindiItalianNepaliPortugueseRomanian

Tax relief for pension contributions

Accountants in Baycliff | Accountants in Bayles | Accountants in Beaumont | Accountants in Beck Bottom | Accountants in Beck Foot | Accountants in Beck Head | Accountants in Beck Side | Accountants in Beckermet | Accountants in Beckfoot | Accountants in Beckside | Accountants in Beetham | Accountants in Belah | Accountants in Belle Vue | Accountants in Berrier | Accountants in Bewaldeth | Accountants in Bewcastle | Accountants in Biglands | Accountants in Birkby | Accountants in Black Combe | Accountants in Blackbeck | Accountants in Blackdyke | Accountants in Blackford | Accountants in Blackpool Gate | Accountants in Blagill | Accountants in Blawith | Accountants in Bleatarn | Accountants in Blencarn | Accountants in Blencogo | Accountants in Blencow | Accountants in Blennerhasset And Torpenhow | Accountants in Blindbothel | Accountants in Blindcrake | Accountants in Blitterlees | Accountants in Bolton New Houses | Accountants in Ipstones | Accountants in Sandon | Accountants in Gowdall | Accountants in Baddeley Green | Accountants in Barton Turn | Accountants in Kilnsey | Accountants in Little Catwick | Accountants in Morthen | Accountants in May Bank | Accountants in Whitgreave | Accountants in Cromarty | Accountants in Pocklington | Accountants in Ashkirk | Accountants in Sewerby | Accountants in Thornholme | Accountants in Walden | Accountants in Walkington | Accountants in Worsbrough | Accountants in Ilminster | Accountants in Achavandra Muir | Accountants in Derwent Reservoir | Accountants in Hayling Island | Accountants in Timsbury | Accountants in Upton Cheyney | Accountants in Lochgilphead | Accountants in Kirk Ireton | Accountants in Barton End | Accountants in Crondall | Accountants in Gorsley | Accountants in Whitminster Church | Accountants in Lower Hartshay | Accountants in Privett | Accountants in Soberton | Accountants in St Mary Bourne | Accountants in New Tupton | Accountants in West Meon

Tax relief for pension contributions

The decision of the Chancellor, Rishi Sunak to increase the tapered annual allowance thresholds in the Budget earlier this month will have been welcomed by many high earners. From 6 April 2020, the tapered annual allowance will increase from £150,000 to £240,000. The annual allowance for tax relief on pensions will remain at £40,000 for 2020-21.

This means that anyone with income below £240,000 will no longer be affected by the tapered annual allowance rules. From April, those earning over £240,000 will begin to see their £40,000 annual allowance tapered. For every complete £2 income exceeds £240,000 the annual allowance is reduced by £1.

The minimum level to which the annual allowance can taper down will also be reduced from £10,000 to £4,000. This reduction in the annual allowance will only kick-in for individuals whose income is over £300,000 and who will lose up to a further £6,000 of annual allowance in 2020-21. This will affect only those with the very highest earnings. A taxpayer earning £312,000 or more will only be able to contribute a maximum of £4,000 into a pension with the benefit of tax relief in 2020-21.

There is also a three year carry forward rule that allows taxpayers to carry forward unused annual allowance from the last three tax years if they have made pension savings in those years. The calculation of the exact amount of unused annual allowance that can be carried forward can be complicated especially if you are subject to the tapered annual allowance.

Proud to be featured in

Happy with our services? Please leave us a Google Review. Click here

Google Review Stars