Entrepreneurs and the self-employed will benefit from government plans to allow unused pension allowances to be carried forward by up to three years, according to Hornbuckle Mitchell.
The Government announced today it would be reducing the annual allowance for pensions tax relief to £50,000 but concerns it would enforce a 'use it or lose it' policy have been allayed.
Hornbuckle Mitchell warned the government in its recent consultation on pension tax relief changes that enforcing a ‘use it or lose it' decision would impact hardest on entrepreneurs, small business owners and the self-employed who do not have regular salaries.
However, allowing the £50,000 limit to be carried forward for up to three years will offer a welcome reprieve for these groups.
Hornbuckle Mitchell says: "Over the last couple of years many entrepreneurs have chosen to invest to help their businesses through tough times rather than to bolster their pensions. Under the current rules with a £255,000 annual allowance they can easily miss a few years and make up the shortfall at a later date.
"We are pleased that by allowing the £50,000 limit to be carried forward for up to three years, they have recognised this problem and taken a significant step towards reducing the potential impact. After all, these are the people the country is relying on to create the jobs and wealth needed to bring us out of the downturn into a more prosperous future."
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