RSA report reignites debate over flat-rate tax relief reform

30% flat rate of tax relief proposed

Jonathan Stapleton
clock • 5 min read

The Royal Society of Arts (RSA) has reignited the debate on the introduction of flat-rate pensions tax relief - saying a 30% flat rate would be progressive, cost-neutral and leave three-quarters of earners better off.

In a report, Venturing to Retire, published in partnership with e-commerce marketplace Etsy - the think tank said 40% of government spending on pension relief goes to the top 10% of those claiming relief. It said this is "deeply disproportionate" - and means that, while pensions tax relief costs HM Treasury £30.5m a year, £11.8bn is spent on people earning more than £70,000. The RSA called for a 30% flat rate to boost the pension pots and individual saving incentives for basic rate taxpayers - a policy change that has long been championed for by former pensions minister Steve Webb. ...

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