WEALTH at work call for effective financial education and guidance to reduce the financial impact upon employees.
The Pre Budget Report announced this week proposed further amendments to the ‘anti-forestalling’
legislation, designed to restrict the opportunity for increasing pension contributions ahead of the
proposed removal of higher rate tax relief for high earners in 2011. Employer pension contributions
must now be included when calculating income against the £150,000 threshold. In addition a new
£130,000 income limit is effective from 9 December 2009 meaning that many more employees will be
impacted.
This, together with the freezing of the personal allowance and income tax bands, mean that
almost all employees will effectively pay more tax not just those higher earners affected by ‘
anti-forestalling’ rules, the removal of personal allowance and the 50% income tax rate. The 1%
increase to national insurance in 2011 will further reduce employees take home pay.
Paul Bloomfield, Tax Specialist at
WEALTH at work comments, 'Many more employees are now affected by these
significant tax changes. All employees will need to be made aware of how they can assess
their position and so avoid an unexpected tax bill'.
Please see the
'further amendments to recent tax
changes will cause confusion for employees' PDF attached.
