CIOT: Tax relief restrictions will increase employer burdens

Date: 1st April 2010

British businesses face increased burdens when the government's planned pensions tax relief restrictions are implemented.

This is the view of the Chartered Institute of Taxation (CIOT), which said the move will mean administrative burdens for all concerned.

Colin Ben-Nathan, chairman of the CIOT's Employment Taxes Sub-Committee, said: "The government's proposed method of restricting tax relief will cause disproportionate complexity and an increase in the costs for employers, pension schemes and the pensions industry as a whole.

"It is disappointing that, having identified the magnitude of the cost to business, the Government is nevertheless continuing with its proposals virtually unchanged."

The CIOT claimed that government figures have revealed that the compliance costs for implementing the new restrictions will be almost £1 billion in the first year.

According to the organisation, in its current state, the proposal is overly complex and "virtually unworkable".

As an alternative measure, the CIOT has called on the government to reduce the amount people can put into registered pension schemes from £255,000 per year to £50,000 per year.