Should you be considering making a pension contribution before 16th March 2016?
There are rumours of what might be announced in the upcoming Budget, the most noticeable being the possibility of changes to tax relief on pension contributions.
The Chancellor is thought to be considering changing tax relief from the current banded rate relief to a flat rate of between 25% and 33% for all taxpayers. If this goes ahead, basic-rate taxpayers will be better off and higher and additional-rate taxpayers will lose a benefit worth up to £8,000 per year.
If you are a higher or additional-rate taxpayer you should consider whether it would be beneficial for you to make a pension contribution before 16th March to take advantage of the higher tax relief. If you are a basic-rate taxpayer, it might be beneficial for you to hold off making that contribution. We have created a factsheet on the proposed new rules, which you can view here.
If you would like to make a contribution to your pension, or to discuss whether this would be beneficial to you, please contact us as soon as possible.
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Mearns & Company are authorised and regulated by the Financial Conduct Authority