The boss of Cheshire-based Chartered Financial Planners Phillip Bates & Co Financial Services has issued a pre-budget warning.
Alan Mellor says that business owners and high earners should take pre-emptive action ahead of the Budget when the Chancellor could announce further pension changes in his statement.
Mellor said: “Business owners and high earners are advised to seek advice before the Budget on March 16th.
“They could be hit by a double whammy of previous announcements which are due to take effect from April this year and potential further announcements, particularly around the levelling of tax relief.
“Higher rate taxpayers currently get tax relief for pension contributions at 40 per cent and businesses are able to pay into employees and get corporation tax relief. Both are believed to be under serious threat of removal.
“This means that any company or individual who is considering any pension contribution in the foreseeable future should, where possible, accelerate this to before March 16th.
“If the rate is cut to 25 per cent, it could make the difference of many thousands of pounds depending on whether someone acts now or after the Budget.
“Everyone with savings in excess of £500,000 in personal pensions should be checking to see if they need to protect their savings from potential tax rates of up to 55 per cent.
“Anyone earning over £110,000 from all sources should be considering their position. Major changes are set to impact them from April, potentially leading to a tax bill of tens of thousands of pounds.
“The impact caused by changes to pension tax relief and lifetime and annual allowances can be mitigated with good planning, but the window to do so is rapidly closing.”
