Blog



Autumn Statement 2016


The Chancellor Phillip Hammond gave his first and last autumn Statement following the announcement that the autumn statement is to be replaced with and autumn budget from 2017 and a spring statement from 2018.

A number of initiatives where introduce to help boast home building, rural areas, transport & rail, digital infrastructure and local growth funds.

Although there was no real announcement the chancellor indicated that he will look at ways to capture more tax from the so called “gig economy” and also incorporation, the way individuals form a company to pay less tax, so watch this space in the upcoming budget.

 

 

Minimum Wage and the National Living Wage

The National Living Wage is to rise from £7.20 to £7.50 a pay rise worth over £500 to a full time worker. The minimum wage is also set out below:-


Aged 21 to 24 from £6.95 to £7.05
Aged 18 to 20 from £5.55 to £6.60
Aged 16 to 17 from £4.00 to £4.05
Apprentices £3.40 £3.50

 

 

National Insurance

Employee & employer national insurance thresholds are to be equalised at £157 per week from next April, this will increase costs to employers (businesses).

 

Allowances and Tax Bands

The personal allowance is set to rise to £11,500 from April 2017 with the target to raise this to £12,500 by the end of this Parliament. Along with this the higher rate threshold is set to rise to £45,000 from April 2017.

 

Corporation Tax

The government is sticking to its plans to cut corporation tax from 20% to 17%.

 

Salary Sacrifice Schemes

Salary sacrifice schemes previously meant that employees could exchange some of their salary for a non-cash benefit in kind. This had the advantage that the employer and employee made tax savings because the benefit is taxed less than salary and in some cases not taxed at all, so a tax rise for those with any elements that will no longer be included.

Pensions, pension’s advice, childcare, Cycle to Work and ultra-low emissions cars will be exempt.

Arrangements in place prior to April 2017 will be protected for up to a year. Certain arrangements will be protected for up to four years, including cars, accommodation and school fees.

 

Letting Agents Fees

Renters will no longer be hit with charges from letting agents as they will be unable to charge the tenant for example when they sign a new tenancy agreement.

 

National Savings and Investment

A new investment bond is to become available from spring 2017. With savers being hit by poor interest rates for a number of year the new bond is to offer an indicative rate of 2.2 per cent.

It will be available to those aged 16 or above and will allow the flexibility to put away between £100 and £3,000.

 

Insurance Premium Tax

Insurance premium tax is set to rise from June 2017 to 12 percent, the government say IPT is a tax on insurers and it is up to them if the costs are passed onto customers by it is likely premiums will rise.

This sees IPT increase from 6% to 12% since October 2015, just 20 months.

 

 

Keep Updated

If you would like to be kept up to date about changes to taxation and how they can impact you register by clicking here.

Subscribe to Updates

Subscribe to:

Have something to say? Leave a comment below.

Leave a comment   Like   Back to Top   Seen 8 times   Liked 0 times

Subscribe to Updates

If you enjoyed this, why not subscribe to free email updates ?

Subscribe to Blog updates

Enter your email address to be notified of new posts:

Subscribe to:

Alternatively, you can subscribe via RSS

‹ Return to Blog

We never share or sell your email address to anyone.

I've already subscribed / don't show me this again

Recent Posts

Inheritance Tax

| 22nd October 2018 | Blogging

Inheritance Tax Inheritance tax (IHT) is levied on a person’s estate when they die, and certain gifts made during an individual’s lifetime. Most gifts made more than seven years before death will escape tax. Therefore, if you plan in advance, gifts can be made tax-free: the result can be a substantial tax saving. We give guidance below on some of the main opportunities for minimising the impact of the tax. It is however important for you to seek specific professional advice appropriate to your personal circumstances. Scope of the tax When a person dies IHT becomes due on their estate. Some lifetime gifts are treated as chargeable transfers but most are ignored providing the donor survives for seven years after the gift. The rate of tax on death is 40% and 20% on lifetime chargeable transfers. For 2015/16 the first £325,000 is chargeable at 0% and this is known as the nil rate band.   Main residence nil rate band The Chancellor announced in the Summer Budget that an additional nil rate band is to be introduced where a residence is passed on death to direct descendants such as a child or a grandchild. This will initially be £100,000 in 2017/18, rising to £125,000 in 2018/19, £150,000 in 2019/20, and £175,000 in 2020/21. It will then increase in line with CPI from 2021/22 onwards. The additional band can only be used in respect of one residential property which has, at some point, been a residence of the deceased. Any unused nil rate band may be transferred to a surviving spouse or civil partner. It will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil rate band, are passed on death to direct descendants. This element will be the subject of a technical consultation and will be legislated for in Finance Bill 2016. There will also be a tapered withdrawal of the additional nil rate band for estates with a net value (after deducting any liabilities but before reliefs and exemptions) of more than £2 million. This will be at a withdrawal rate of £1 for every £2 over this threshold.   Charitable giving A reduced rate of IHT applies where 10% or more of a deceased’s net estate (after deducting IHT exemptions, reliefs and the nil rate band) is left to charity. In those cases the 40% rate will be reduced to 36%.   IHT on lifetime gifts Lifetime gifts fall into one of three categories: •  a transfer to a company or a trust is immediately chargeable•  exempt gifts which will be ignored both when they are made and also on the subsequent death of the donor, eg gifts to charity•  any other transfers will be potentially exempt transfers (PETs) and IHT is only due if the donor dies within seven years of making the gift. It might therefore be more advisable to regard them as potentially chargeable transfers. IHT on death The main IHT charge is likely to arise on death. IHT is charged on the value of the estate. This includes any interests in trust property where the deceased had a right to income from, or use of, the property. Furthermore: •  PETs made within seven years become chargeable•  there may be an additional liability because of chargeable transfers made within the previous seven years. Estate planning Much estate planning involves making lifetime transfers to utilise exemptions and reliefs or to benefit from a lower rate of tax on lifetime transfers.However careful consideration needs to be given to other factors. For example a gift that saves IHT may unnecessarily create a capital gains tax (CGT) liability. Furthermore the prospect of saving IHT should not be allowed to jeopardise the financial security of those involved. Use of PETs Wherever possible gifts should be made as PETs rather than as chargeable transfers. This is because the gift will be exempt from IHT if the donor survives for seven years.   Nil rate band and seven year cumulation Chargeable transfe...

Autumn Statement 2016

| 22nd October 2018 | Blogging

Autumn Statement Key Changes & Updates for Individuals The biggest surprise after announcing in the last budget that there would be cuts to tax credits was the decision to keep the current regime, it had after all faced fierce resistance from both houses. The Chancellor did however make some changes to the benefits & tax system for individuals. Pensions A single tier pension for new pensioners from April 2016 has been set at £155.65 per week but not everyone will be entitled to the full single tier rate. The basic state pension is set to rise by £3.35 to £119.30 per week next year. With those in retirement benefitting from their state pension increasing by the higher of 2.5%, CPI inflation or the average wage growth, the government has pledged to retain this throughout this term. Landlords and Second Homes Landlords should be warned that from 2019 any Capital Gains Tax will become payable from 30 days of the sale, putting cash into the Governments pockets up to 21 months earlier than previously payable. Stamp duty has been set 3% higher on additional properties whether it is a buy to let or a second home to come into effect from 1 April 2016. This is expected to raise £1 billion by 2021. Administration of a Deceased Estate The government is to set out further plans for legislation to come into effect in 2016 to allow the ISA savings of a deceased person to continue to benefit from tax advantages throughout the administration of their estate. Temporary absence in Housing Benefit and Pension Credit The government will end the payment of Housing Benefit and Pension Credit to claimants to who travel outside of Great Britain for longer than 4 weeks consecutively, from April 2016.  Free child care 30 hours of free childcare for three and four-year-olds will be available from 2017, but only to parents working more than 16 hours and who each earn £100,000 or less which is lower than the initially proposed £150,000 limit.    Key Changes & Updates for Business A small amount of welcome news for smaller businesses, although for the larger corporate entities and new tax in the form of the “Apprenticeship Levy”. Apprenticeship Levy The government will introduce the apprenticeship levy in April 2017. It will be set at a rate of 0.5% of an employer’s pay bill and will be paid through PAYE. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means that the levy will only be paid on any pay bill in excess of £3 million. Company Car Tax Diesel Supplement From April 2016 the 3 percentage point differential between diesel cars and petrol cars will be retained until April 2021. Small Business Rate Relief (SBRR) The government will extend the doubling of SBRR for a further year from 1 April 2016. Averaging for Farmers The average period for self-employed farmers will be extended from 2 years to 5 years as of April 2016, with farmers having the option of either averaging period....

The Basic's of VAT

| 22nd October 2018 | Blogging

The Basic's of VAT VAT VAT registered businesses act as unpaid tax collectors and are required to account both promptly and accurately for all the tax revenue collected by them. The VAT system is policed by HMRC with heavy penalties for breaches of the legislation. Ignorance is not an acceptable excuse for not complying with the rules. We highlight below some of the areas that you need to consider. It is however important for you to seek specific professional advice appropriate to your circumstances. What is VAT?   Scope A transaction is within the scope of VAT if: •  there is a supply of goods or services•  made in the UK•  by a taxable person•  in the course or furtherance of business. Inputs and outputs Businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs. Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT. The output VAT is being collected from the customer by the business on behalf of HMRC and must be regularly paid over to them. However the input VAT suffered on the goods and services purchased can be deducted from the amount of output tax owed. Please note that certain categories of input tax can never be reclaimed, such as that in respect of third party UK business entertainment and for most business cars. Points to consider Supplies Taxable supplies are mainly either standard rated (20%) or zero rated (0%). The standard rate was 17.5% prior to 4 January 2011. There is in addition a reduced rate of 5% which applies to a small number of certain specific taxable supplies. There are certain supplies that are not taxable and these are known as exempt supplies. There is an important distinction between exempt and zero rated supplies. •  If your business is making only exempt supplies you cannot register for VAT and therefore cannot recover any input tax.•  If your business is making zero rated supplies you should register for VAT as your supplies are taxable (but at 0%) and recovery of input tax is allowed.   Registration - is it necessary? You are required to register for VAT if the value of your taxable supplies exceeds a set annual figure (£82,000 from 1 April 2015).If you are making taxable supplies below the limit you can apply for voluntary registration. This would allow you to reclaim input VAT, which could result in a repayment of VAT if your business was principally making zero rated supplies.If you have not yet started to make taxable supplies but intend to do so, you can apply for registration. In this way input tax on start up expenses can be recovered. Taxable person A taxable person is anyone who makes or intends to make taxable supplies and is required to be registered. For the purpose of VAT registration a person includes: •  individuals•  partnerships•  companies, clubs and associations•  charities. If any individual carries on two or more businesses all the supplies made in those businesses will be added together in determining whether or not the individual is required to register for VAT. Administration Once registered you must make a quarterly return to HMRC showing amounts of output tax to be accounted for and of deductible input tax together with other statistical information. All businesses have to file their returns online.Returns must be completed within one month of the end of the period it covers, although generally an extra seven calendar days are allowed for online forms. Electronic payment is also compulsory for all businesses. Businesses who make zero rated supplies and who receive repayments of VAT may find it beneficial to submit monthly returns. Businesses with expected annual taxable supplies not exceeding £1,350,000 may apply to join the annual accounting scheme whereby they will make monthly or quarterly payments of VAT but will only have to complete one VAT return at the end of the year. Record keeping It is i...

Attack On Pension Savings

| 22nd October 2018 | Blogging

Attack On Pension Savings It is expected that the chancellor will announce in the Budget on the 16th March 2016 a flat rate tax relief on pension contributions. This has come under a lot of scrutiny from many financial professionals but is seen as the lesser of two evils when considered alongside a ‘Pension ISA’. The chancellor is considering a flat rate of between 20% and 33% which if set at 25% could have a major impact on those already in pension schemes/those planning their retirement investments. For those who have workplace pensions with defined fixed pension contributions this could reduce their monthly take home pay. As an example an individual on £60,000 salary, paying 5% into a defined fixed pension contribution would be paying in £3,000 to their pension. Under current legislation a higher rate tax payer would pay in £1,800 and the government would top up the contributions with £1,200 (tax refund into scheme). However, if a flat rate of 25% was introduced using the same scenario above, the individual would be required to pay in £2,250 with the government only topping up the contributions with £750. This would leave the employee having to pay in the additional £450, which would be taken from their salary. The below table shows how an individual paying 5% of gross salary into a defined fixed pension would be set to either lose or benefit :- Salary 5% Gross Contributions Current Tax Relief Current Net Contributions Proposed Flate Rate Relief @ 25% Gain/(Loss) £20,000 £1,000 20% £800 £750 £50 £40,000 £2,000 20% £1,600 £1,500 £100 £80,000 £4,000 40% £2,400 £3,000 £(600) £120,000 £6,000 40% £3,600 £4,500 £(900) £180,000 £9,000 45% £4,950 £6,750 £(1,800) £250,000 £12,500 45% £6,875 £9,375 £(2,500)   The treasury has not decided on how or if the changes are to come into effect but we are sure that the budget will shed some more light on how these changes may affect us all. ...


Filing Tax/Accounts with HMRC Every 3 Months! Are you Prepared?


Many people have reported still feeling in the dark about HMRCs new propositions when it comes to filing business and personal tax returns online from 2018, although one thing is for sure; we are certainly stepping into the Digital era.


This time of year the word ‘deadline’ looms over all of our heads as the paper tax return must be filed by October 31st, albeit it only this way for two more years. Statistics show however, that the majority are already making the switch with only 11 percent of us filing by paper in 2015.


Despite online filing becoming increasingly more common for businesses, research highlights that many still feel in the dark about the foundations of ‘Making Tax Digital’ which was first announced in the 2015 budget.


HMRC have stipulated that one of the four ‘foundations’ of Making Tax Digital will be for businesses, proposing that they should not have to wait until the end of the tax year or even longer before knowing how much tax they should pay. This will be achieved by filing quarterly Tax Returns online.


The Telegraph have commented that this will put an ‘unnecessary burden’ on companies that do still feel that they are in the dark. Experts have told the Treasury Select Committee that this controversial switch is being hastily imposed without any detail of what companies must do.


Mike Cherry, head of Federation of Small Businesses has also told The Telegraph that he predicts ‘these changes would cost small businesses an extra £2,770 a year to file its returns, with many ill-equipped to handle online record-keeping’
HMRC’s intentions, on the other hand, are clear for the move forward. With the abolishment of the paper Tax Return and the October 31st deadline, businesses will be able to concentrate on putting people and profit first, rather than paperwork. Similarly, it seems that there will be greater clarity when it comes to paying tax bills.


Edward Troup, executive chair of HMRC, acknowledged the significant changes of this digital revolution by bringing the tax system into the 21st century and to help make HMRC one of the most digitally-advances tax administrations in the world.

 

Klarity Vision will be speaking at The Business Show at Olmpia, London on Thursday 17th November about this major change for businesses, you can obtain a FREE ticket to the event here. We will be releasing a recording of the seminar after the show and you can register to receive a link by Clicking Here.

Subscribe to Updates

Subscribe to:

Have something to say? Leave a comment below.

Leave a comment   Like   Back to Top   Seen 8 times   Liked 0 times

Subscribe to Updates

If you enjoyed this, why not subscribe to free email updates ?

Subscribe to Blog updates

Enter your email address to be notified of new posts:

Subscribe to:

Alternatively, you can subscribe via RSS

‹ Return to Blog

We never share or sell your email address to anyone.

I've already subscribed / don't show me this again

Recent Posts

Inheritance Tax

| 22nd October 2018 | Blogging

Inheritance Tax Inheritance tax (IHT) is levied on a person’s estate when they die, and certain gifts made during an individual’s lifetime. Most gifts made more than seven years before death will escape tax. Therefore, if you plan in advance, gifts can be made tax-free: the result can be a substantial tax saving. We give guidance below on some of the main opportunities for minimising the impact of the tax. It is however important for you to seek specific professional advice appropriate to your personal circumstances. Scope of the tax When a person dies IHT becomes due on their estate. Some lifetime gifts are treated as chargeable transfers but most are ignored providing the donor survives for seven years after the gift. The rate of tax on death is 40% and 20% on lifetime chargeable transfers. For 2015/16 the first £325,000 is chargeable at 0% and this is known as the nil rate band.   Main residence nil rate band The Chancellor announced in the Summer Budget that an additional nil rate band is to be introduced where a residence is passed on death to direct descendants such as a child or a grandchild. This will initially be £100,000 in 2017/18, rising to £125,000 in 2018/19, £150,000 in 2019/20, and £175,000 in 2020/21. It will then increase in line with CPI from 2021/22 onwards. The additional band can only be used in respect of one residential property which has, at some point, been a residence of the deceased. Any unused nil rate band may be transferred to a surviving spouse or civil partner. It will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil rate band, are passed on death to direct descendants. This element will be the subject of a technical consultation and will be legislated for in Finance Bill 2016. There will also be a tapered withdrawal of the additional nil rate band for estates with a net value (after deducting any liabilities but before reliefs and exemptions) of more than £2 million. This will be at a withdrawal rate of £1 for every £2 over this threshold.   Charitable giving A reduced rate of IHT applies where 10% or more of a deceased’s net estate (after deducting IHT exemptions, reliefs and the nil rate band) is left to charity. In those cases the 40% rate will be reduced to 36%.   IHT on lifetime gifts Lifetime gifts fall into one of three categories: •  a transfer to a company or a trust is immediately chargeable•  exempt gifts which will be ignored both when they are made and also on the subsequent death of the donor, eg gifts to charity•  any other transfers will be potentially exempt transfers (PETs) and IHT is only due if the donor dies within seven years of making the gift. It might therefore be more advisable to regard them as potentially chargeable transfers. IHT on death The main IHT charge is likely to arise on death. IHT is charged on the value of the estate. This includes any interests in trust property where the deceased had a right to income from, or use of, the property. Furthermore: •  PETs made within seven years become chargeable•  there may be an additional liability because of chargeable transfers made within the previous seven years. Estate planning Much estate planning involves making lifetime transfers to utilise exemptions and reliefs or to benefit from a lower rate of tax on lifetime transfers.However careful consideration needs to be given to other factors. For example a gift that saves IHT may unnecessarily create a capital gains tax (CGT) liability. Furthermore the prospect of saving IHT should not be allowed to jeopardise the financial security of those involved. Use of PETs Wherever possible gifts should be made as PETs rather than as chargeable transfers. This is because the gift will be exempt from IHT if the donor survives for seven years.   Nil rate band and seven year cumulation Chargeable transfe...

Autumn Statement 2016

| 22nd October 2018 | Blogging

Autumn Statement Key Changes & Updates for Individuals The biggest surprise after announcing in the last budget that there would be cuts to tax credits was the decision to keep the current regime, it had after all faced fierce resistance from both houses. The Chancellor did however make some changes to the benefits & tax system for individuals. Pensions A single tier pension for new pensioners from April 2016 has been set at £155.65 per week but not everyone will be entitled to the full single tier rate. The basic state pension is set to rise by £3.35 to £119.30 per week next year. With those in retirement benefitting from their state pension increasing by the higher of 2.5%, CPI inflation or the average wage growth, the government has pledged to retain this throughout this term. Landlords and Second Homes Landlords should be warned that from 2019 any Capital Gains Tax will become payable from 30 days of the sale, putting cash into the Governments pockets up to 21 months earlier than previously payable. Stamp duty has been set 3% higher on additional properties whether it is a buy to let or a second home to come into effect from 1 April 2016. This is expected to raise £1 billion by 2021. Administration of a Deceased Estate The government is to set out further plans for legislation to come into effect in 2016 to allow the ISA savings of a deceased person to continue to benefit from tax advantages throughout the administration of their estate. Temporary absence in Housing Benefit and Pension Credit The government will end the payment of Housing Benefit and Pension Credit to claimants to who travel outside of Great Britain for longer than 4 weeks consecutively, from April 2016.  Free child care 30 hours of free childcare for three and four-year-olds will be available from 2017, but only to parents working more than 16 hours and who each earn £100,000 or less which is lower than the initially proposed £150,000 limit.    Key Changes & Updates for Business A small amount of welcome news for smaller businesses, although for the larger corporate entities and new tax in the form of the “Apprenticeship Levy”. Apprenticeship Levy The government will introduce the apprenticeship levy in April 2017. It will be set at a rate of 0.5% of an employer’s pay bill and will be paid through PAYE. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means that the levy will only be paid on any pay bill in excess of £3 million. Company Car Tax Diesel Supplement From April 2016 the 3 percentage point differential between diesel cars and petrol cars will be retained until April 2021. Small Business Rate Relief (SBRR) The government will extend the doubling of SBRR for a further year from 1 April 2016. Averaging for Farmers The average period for self-employed farmers will be extended from 2 years to 5 years as of April 2016, with farmers having the option of either averaging period....

The Basic's of VAT

| 22nd October 2018 | Blogging

The Basic's of VAT VAT VAT registered businesses act as unpaid tax collectors and are required to account both promptly and accurately for all the tax revenue collected by them. The VAT system is policed by HMRC with heavy penalties for breaches of the legislation. Ignorance is not an acceptable excuse for not complying with the rules. We highlight below some of the areas that you need to consider. It is however important for you to seek specific professional advice appropriate to your circumstances. What is VAT?   Scope A transaction is within the scope of VAT if: •  there is a supply of goods or services•  made in the UK•  by a taxable person•  in the course or furtherance of business. Inputs and outputs Businesses charge VAT on their sales. This is known as output VAT and the sales are referred to as outputs. Similarly VAT is charged on most goods and services purchased by the business. This is known as input VAT. The output VAT is being collected from the customer by the business on behalf of HMRC and must be regularly paid over to them. However the input VAT suffered on the goods and services purchased can be deducted from the amount of output tax owed. Please note that certain categories of input tax can never be reclaimed, such as that in respect of third party UK business entertainment and for most business cars. Points to consider Supplies Taxable supplies are mainly either standard rated (20%) or zero rated (0%). The standard rate was 17.5% prior to 4 January 2011. There is in addition a reduced rate of 5% which applies to a small number of certain specific taxable supplies. There are certain supplies that are not taxable and these are known as exempt supplies. There is an important distinction between exempt and zero rated supplies. •  If your business is making only exempt supplies you cannot register for VAT and therefore cannot recover any input tax.•  If your business is making zero rated supplies you should register for VAT as your supplies are taxable (but at 0%) and recovery of input tax is allowed.   Registration - is it necessary? You are required to register for VAT if the value of your taxable supplies exceeds a set annual figure (£82,000 from 1 April 2015).If you are making taxable supplies below the limit you can apply for voluntary registration. This would allow you to reclaim input VAT, which could result in a repayment of VAT if your business was principally making zero rated supplies.If you have not yet started to make taxable supplies but intend to do so, you can apply for registration. In this way input tax on start up expenses can be recovered. Taxable person A taxable person is anyone who makes or intends to make taxable supplies and is required to be registered. For the purpose of VAT registration a person includes: •  individuals•  partnerships•  companies, clubs and associations•  charities. If any individual carries on two or more businesses all the supplies made in those businesses will be added together in determining whether or not the individual is required to register for VAT. Administration Once registered you must make a quarterly return to HMRC showing amounts of output tax to be accounted for and of deductible input tax together with other statistical information. All businesses have to file their returns online.Returns must be completed within one month of the end of the period it covers, although generally an extra seven calendar days are allowed for online forms. Electronic payment is also compulsory for all businesses. Businesses who make zero rated supplies and who receive repayments of VAT may find it beneficial to submit monthly returns. Businesses with expected annual taxable supplies not exceeding £1,350,000 may apply to join the annual accounting scheme whereby they will make monthly or quarterly payments of VAT but will only have to complete one VAT return at the end of the year. Record keeping It is i...

Attack On Pension Savings

| 22nd October 2018 | Blogging

Attack On Pension Savings It is expected that the chancellor will announce in the Budget on the 16th March 2016 a flat rate tax relief on pension contributions. This has come under a lot of scrutiny from many financial professionals but is seen as the lesser of two evils when considered alongside a ‘Pension ISA’. The chancellor is considering a flat rate of between 20% and 33% which if set at 25% could have a major impact on those already in pension schemes/those planning their retirement investments. For those who have workplace pensions with defined fixed pension contributions this could reduce their monthly take home pay. As an example an individual on £60,000 salary, paying 5% into a defined fixed pension contribution would be paying in £3,000 to their pension. Under current legislation a higher rate tax payer would pay in £1,800 and the government would top up the contributions with £1,200 (tax refund into scheme). However, if a flat rate of 25% was introduced using the same scenario above, the individual would be required to pay in £2,250 with the government only topping up the contributions with £750. This would leave the employee having to pay in the additional £450, which would be taken from their salary. The below table shows how an individual paying 5% of gross salary into a defined fixed pension would be set to either lose or benefit :- Salary 5% Gross Contributions Current Tax Relief Current Net Contributions Proposed Flate Rate Relief @ 25% Gain/(Loss) £20,000 £1,000 20% £800 £750 £50 £40,000 £2,000 20% £1,600 £1,500 £100 £80,000 £4,000 40% £2,400 £3,000 £(600) £120,000 £6,000 40% £3,600 £4,500 £(900) £180,000 £9,000 45% £4,950 £6,750 £(1,800) £250,000 £12,500 45% £6,875 £9,375 £(2,500)   The treasury has not decided on how or if the changes are to come into effect but we are sure that the budget will shed some more light on how these changes may affect us all. ...