Pension: Rishi Sunak urged not to ignore ‘tax kink’ as impact of furlough scheme revealed
Members of pension schemes who don’t pay Income Tax – usually those earning less than £12,500 per year – are permitted to basic rate tax relief (20 percent) on pension contributions up to £2,880 a year.
In practice, this means that HM Revenue and Customs (HMRC) will top up a net contribution of £2,880 to a gross £3,600.
However, this tax relief is only available where the pension scheme operates on a relief at source basis – known as RAS.
It’s not available for schemes that operate a net pay arrangement.
Adrian Boulding, Director of Policy, NOW: Pensions said: “It’s becoming extremely visible that women are being hit harder this pandemic when it comes to their finances and will continue to be disproportionately impacted as the economic crisis unravels.
Published at Mon, 06 Jul 2020 13:04:00 +0000