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Treasury ‘considers pension tax raid’ to pay for Covid pandemic spending

Taxes on pension contributions might improve this autumn underneath spending plans being thought-about by the Treasury, in accordance to stories.

Officials are believed to be taking a look at a number of other ways of elevating money to pay for the surge in public spending throughout the Covid pandemic.

However, Downing Street has repeatedly dismissed the potential of scrapping the “triple lock” system, which might see pensions rise by up to 6 per cent subsequent year.

Now, in accordance to The Daily Telegraph, the Treasury is drawing up plans to change the best way pension contributions are taxed.

One proposal is to slash the pensions lifetime allowance from £1,073,100 to round £800,000. Pension financial savings above the allowance are taxed at 55 per cent if taken out as a lump sum or 25 per cent if paid in some other means.

Another plan includes decreasing the extent of pension tax reduction accessible to higher-rate taxpayers from 40 per cent to 20 per cent.

The third proposal includes new taxes on employer pension contributions.

Pension tax reform might be included in Rishi Sunak’s subsequent autumn assertion due in November, “well-placed figures” informed The Telegraph.

It follows a collection of stories primarily based on Whitehall sources suggesting that the prime minister and his chancellor are on a “collision course” over costly guarantees to build a £200m royal yacht, cap social care prices at £50,000 and sort out local weather change.

Meanwhile, Mr Sunak and different senior ministers are reportedly making ready to take Boris Johnson to job over his fashion of management.

The Guardian stated that the cupboard are pushing the prime minister to contain them in key choices somewhat than counting on a “close clique in No 10”.

In their 2019 manifesto, the Conservatives pledged not to increase the charges of earnings tax, nationwide insurance coverage or VAT and promised to retain the triple lock on pensions.

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