The Cost Of Tax Relief

Share

Last October HMRC updated its statistics on tax relief costs for pension arrangements, incorporating provisional figures for 2015/16, the latest reported tax year. At the time we commented that the data was inevitably dated because of tax return timing and hard to compare with previous years because of the roll out of auto enrolment.

HMRC have now published revised estimates for the 2017/18 cost of pensions tax reliefs as part of its annual updating of the estimated costs of the principal tax reliefs. These are not directly comparable with the historic data figures because in arriving at the cost of income tax relief, HMRC make a deduction equal to the amount of tax received from pensions in payment. Nevertheless, the numbers tell their own story:

Tax Year 13/14£m 14/15£m 15/16£m 16/17£m 17/18*£m
Income Tax Cost 20,700 21,150 23,400 23,650 24,050
Employer NIC Cost 13,850 13,700 15,700 16,350 16,900
Total Cost 34,550 34,850 39,100 40,000 40,950

*Forecast

As we head towards the Spring Statement, that near £41bn figure may weigh on the Chancellor’s mind.

Source: https://www.techlink.co.uk/

Share

Other News

Tax Year End Planning Checklist For Individuals – 2023/24 Tax Year

As tax year end approaches, there is still time to make use of your available reliefs and allowances.

This tax year end planning checklist covers the main planning opportunities available to UK resident individuals and will hopefully help to inspire action to reduce tax for the 2023/24 tax year and to plan ahead for 2024/25.

Higher Rate Taxpaying Is A Growing Club

As tax rate band thresholds are changing, understanding the impact on high rate taxpayers and the economy is crucial.

5 Top Tips To Boost Your Pension Savings

It was recently revealed in the media that the amount we need to enjoy a ‘moderate’ retirement has increased by £8,000 per annum, a 38% increase, in just one year.