The government has introduced anti-avoidance measures to stop people using salary sacrifice to ‘lower' their salary to get around the lower annual allowance for high earners.
The Chancellor used his Summer Budget to restrict tax relief on pension contributions for high earners. For every £1 of earnings over £150,000, the annual allowance will reduce by 50p so that those earning £210,000 and above would have an allowance of £10,000. The Finance Bill 2015, released yesterday, explains how the reduced annual allowance taper will work for people earning more than £150,000. Explanatory notes released alongside the bill state the anti-avoidance measures will "prevent individuals entering into a salary sacrifice or flexible remuneration arrangement on or after...
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