Annual allowance changes

From tax year 2020/21, the "adjusted income" figure above which the individual's annual allowance is subject to a tapering reduction is increased from £150,000 to £240,000.  The "threshold income" figure (below which no account is taken of the value of employer pension contributions when working out whether someone is subject to the taper) will rise from £110,000 to £200,000.

Currently, a person subject to the maximum annual allowance taper will have an annual allowance of £10,000.  From tax year 2020/21, the annual allowance will reduce to £4000 for someone who is subject to the maximum taper (an individual with total income, including pension accrual, over £300,000).

RPI consultation

As expected the Government has published a consultation on reforming the Retail Prices Index methodology.

Call for evidence on administration of pensions tax relief

The government will shortly publish a consultation on the administration of pensions tax relief to address the discrepancy in tax treatment which arises for those earning around or below the personal allowance depending on whether their scheme operates relief at source or a net pay arrangement.

Lifetime allowance

The lifetime allowance will rise in line with CPI for tax year 2020/21, giving a lifetime allowance of £1,073,100.