HM Revenue and Customs (HMRC) has again postponed the publication of the estimated cost of the 2018/19 pension tax relief to ensure the data is free from errors.
The estimates of the pension tax relief 2018/19 will be published according to the tax office together with the statistics for 2019/20 in September 2021.
In this way, HMRC can “work to ensure that the data provided by pension systems is correct and of the highest standard”.
Typically, HMRC publishes its “PEN 6” assessment of the tax relief costs of registered pension schemes annually along with other personal pension data.
The last publication took place in September 2019 with the PEN-6 figures for the 2017/18 discharge.
The figures for 2018/19 should have been published in September 2020.
There are now rumors that the government is considering changing pension tax policy.
However, consultancy LCP asked how it might consider making changes to the tax break without knowing the cost of that relief.
A report by The Telegraph earlier this week said measures considered by the Treasury Department included lowering the lifelong allowance, introducing a flat-rate tax break or taxing employers’ contributions.
An LCP spokesperson said: “Gathering meaningful information for Table 6 has always been a challenge, especially with regard to occupational pension schemes for which there is no direct data (e.g. the arguments that support the assessment of the relief for DB Deny delimitation).
“And the notes to the table always say: ‘The figures are based on administrative data and information from the HMRC, compiled by the Office for National Statistics (ONS) from various sources. The costs are subject to extensive revisions and show a particularly high error rate ”.
“It is not clear what the data errors could include. But it is worrying that there may be data errors in personal pension statistics – an area where one would have expected clear sources of information. “
An HMRC spokesman said, “Unfortunately, HMRC will not be releasing the full set of personal pension statistics today, as previously announced. In this way we can ensure that the data provided by pension systems is correct and of a high standard.
“We apologize for the delay and the full statistics will be released in September.”
Earlier this week (June 21), Steven Cameron, Aegon’s pension director, warned that proposals to reduce the higher tax breaks on pensions while maintaining the triple lockdown on state pensions would hit the younger generations hardest.
According to Cameron, maintaining the triple lock on the state pension without adjustment would likely bring an unexpected increase for state pensioners next April, paid for by the working-age population.
And any plans to cut generous pension tax breaks – including the introduction of a tax on employers’ contributions – would hurt many working-age retirees and create “a cross-generational double-blow”.
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