Recent statistics reveal a significant increase in the amount of annual pension tax relief, exceeding \u00a350 billion for the first time.<\/p>\n
<\/p>\n
This marks a \u00a314 billion rise over five years, highlighting the growing importance of understanding these changes and their implications for your business and employees.<\/p>\n
The substantial increase in pension tax relief<\/strong><\/p>\n In the 2022-23 tax year, taxpayers received a total of \u00a351.3 billion in tax reliefs on pension contributions. This figure comprises \u00a325.4 billion in Income Tax and \u00a325.9 billion in National Insurance Contributions (NICs).<\/p>\n Comparatively, in the 2017-18 tax year, these figures were substantially lower, at \u00a319.9 billion for Income Tax and \u00a317.3 billion for NICs.<\/p>\n Leading non-structural tax relief<\/strong><\/p>\n Pension tax relief now stands as the largest single non-structural tax relief, surpassing private residence relief at \u00a336.7 billion and reduced rate VAT breaks on food, which cost \u00a323.3 billion.<\/p>\n These figures have made it clear how important pension contributions have become when it comes to the wider scope of tax relief.<\/p>\n The impact of fiscal drag<\/strong><\/p>\n The cost of funding the income tax break on pensions is set to rise to \u00a327.7 billion next year, a rise of \u00a32 billion.<\/p>\n The change is attributed to adjustments in the national allowance and the abolition of the lifetime allowance, a factor known as fiscal drag.<\/p>\n Changes in NICs relief<\/strong><\/p>\n While NICs relief is expected to decrease slightly in the next tax year due to a two per cent cut in the National Insurance rate, it will still represent a substantial cost to the Government, estimated at \u00a325.3 billion in 2023-24.<\/p>\n Implications for business owners<\/strong><\/p>\n These developments are important for business owners to understand so you can effectively manage your pensions within your payroll.<\/p>\n The rising rate of pension tax relief not only benefits your employees but also has implications for your business’s financial planning and payroll management.<\/p>\n Staying informed and adapting to these changes is key to ensuring compliance and maximising the benefits for both your business and your employees.<\/p>\n If you would like more information about the rising rate of pension tax relief and how your business can effectively manage your payroll, please contact our team today for expert advice. <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Recent statistics reveal a significant increase in the amount of annual pension tax relief, exceeding \u00a350 billion for the first time.<\/p>\n","protected":false},"author":2,"featured_media":5490,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,125,30,56,31,44,4,26,7,27,128],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5488"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=5488"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5488\/revisions"}],"predecessor-version":[{"id":5489,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5488\/revisions\/5489"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/5490"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=5488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=5488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=5488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}