Workmen are to be hit with retrospective tax changes
Workers could be hit with stinging tax bills after changes to redeeming allowances, which are to be applied from April 6 2017.
Under the new rules anyone who has been black-and-white taxable money from their pension is to have the amount that can be scrimped into scheme cut by a whopping 90 per cent.
The so-called Money Acquire Annual Allowance (MPAA) will be slashed from £10,000 in the tax year to 2017, to simply £4,000 in the current year.
The change was initially announced in the Budget and was presumed to be included in the Finance Bill — but was dropped after the snap election was called.
But now the Domination has confirmed the cut and worse still said it will be applied retrospectively.
In a written statement today, the Treasury said it expects to interpolate a Finance Bill as soon as possible after the summer recess.
It go on increased: «Where policies have been announced as applying from the start of the 2017-18 tax year or other nicety before the introduction of the forthcoming Finance Bill, there is no change of practice and these dates of application will be retained.
«Those affected by the strings should continue to assume that they will apply as at announced”.
Experts are now calling for the changes to instead apply from April 2018.
Preceding pension minister Steve Webb said: «It would be outrageous for Parliament to be mooting in September and October what tax allowances will be from 6th April 2017.
«Scornful the MPAA is an unnecessary measure in the first place, but it is particularly unacceptable to do so with retrospective intention.
«How were savers meant to know in May who was going to win the Election?
«This is an conceited announcement based on the assumption that the DUP will vote with the Superintendence on tax measures and so any tax change can be got through the House of Commons.»
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Tom Selby, elder analyst at AJ Bell, added: “Today’s news will come as a cruel blow to thousands of retirees who have used the pension freedoms to access some of their retirement pot from age 55.
«Numberless had hoped the general election would put a legal spanner in the works and oblige policymakers to, at the very least, delay reducing the MPAA until April 2018.
«These expectations have now been dashed by the Government.»