Pension tax relief to be SLASHED for high earners in £10billion tax grab

Boris Johnson will meet his new Chancellor Rishi Sunak for detailed talks about the forthcoming statement amid suggestions the pair are keen to relax spending rules. The Treasury is understood to have drawn up plans to slash the rate of relief for higher earners from 40 percent to 20 percent in a move that would raise £10billion a year.

The UK’s tax burden is already near a historically high level

Lord Lamont

Higher earners get 40 percent tax relief on pension contributions, compared with 20 percent for lower earners but the proposed changes would mean everyone would get 20 percent pension tax relief.

A report in the Financial Times suggested previous Chancellor Sajid Javid was not entirely convinced by the plan, which is likely to spark fierce opposition among the ranks of traditional Tories if introduced in the budget.

There are growing concerns on the Tory benches over hints Mr Johnson wants next month’s budget to mount a tax raid on Middle England.

Then Prime Minister has already had to scrap plans for a so-called “mansion tax” based on a nationwide revaluation of homes because of a backlash from Conservative MPs and grassroots supporters.

He is said to have “cooled” on the idea of a high-value property levy to squeeze more cash out of high-earners following the outcry.

Downing Street has refused to comment on plans for the budget.

But Mr Sunak posted a picture of himself in his new office on Twitter and said: “Cracking on with preparations for my first budget on March 11.

“It will deliver on the promises we made to the British people – levelling up and unleashing the country’s potential.”

Transport Secretary Grant Shapps, in an interview on the BBC1 Andrew Marr Show, pointed out that the Tory manifesto for the general election last December “rules out specific tax rises”.

Former Tory chancellor Lord Lamont said many Tory supporters were “horrified” by the idea of tax increases including the so-called mansion tax.

He said: “The UK’s tax burden is already near a historically high level.”

He said he hoped Mr Sunak would “find ways to make economies, ensure infrastructure projects are properly managed and keep spending under sufficiently tight control so that at least we avoid penal tax increases.”

Former Tory Cabinet minister John Redwood has also warned that a mansion tax could “destroy” optimism and growth.

Mr Redwood said instead of tax rises the Government should be drawing up a list of targeted tax cuts, including stamp duty, to stimulate growth.

Brexiteer Cabinet will send chills through EU, says PATRICK O’FLYNN[OPINION]
Real reason Boris Johnson pushed Sajid Javid out REVEALED[INSIGHT]
Rishi Sunak new Chancellor: Who is Rishi Sunak? [SPOTLIGHT]

He said: “You cannot tax people into prosperity. You do not make the less well-off rich by taxing entrepreneurs to take fewer risks and run fewer businesses.”

Mr Sunak, who replaced Mr Javid when he resigned in last Thursday’s reshuffle rather than fire his team of aides. is understood to be considering delaying the budget beyond the currently announced date of March 11.

Source: Read Full Article