Jeremy Hunt delays financial statement until November 17th
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Jeremy Hunt is plotting to take up to £10billion more from earners who are better off to help support public funding. The Chancellor could force middle-class workers to pay more in income tax by slashing the relief they currently enjoy on their pension contributions.
Leading officials in Rishi Sunak’s Government met last night in Downing Street to discuss the upcoming Autumn Statement, which Mr Hunt will deliver to Parliament in a fortnight.
The Chancellor is said to be in discussions over changing tax rules which are designed to encourage workers to save into their pensions pots.
Ministers have discussed reducing the income tax relief rate for Britain’s 5.5million higher-rate taxpayers from 40p to a flat rate, according to the Sunday Telegraph.
This could be cut to a flat rate as low as 20p.
One Treasury source told the paper that income tax relief on pensions “has been discussed” ahead of the highly anticipated statement.
They added, however, that by Saturday night, no “white smoke” had emerged.
Another option being considered is to increase the number of very high earners for whom the tax relief on pensions is cut even further.
A rate reduction to 20 percent for high earners would raise for the Exchequer up to £10billion a year.
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Former Pensions Minister Sir Steve Webb told the Sunday Telegraph that such a move would act against the interests of many Tory voters, risking a further battering in support.
He said: “£10billion means five million, mainly Tory, voters losing £2,000 per year each.
“If you wanted to alienate your core vote by taking away the higher rate of tax relief then you have done the job.”
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Business writer Ian King also described the plan as an “assault” on working Britons.
He wrote in a post on Twitter: “If this comes to pass, it is an assault on the ability of millions of private sector workers to save for their retirement.”
Mr King added that, if reports are correct, this has been “devised by Treasury mandarins whose own gold plated pensions are paid for by those very workers”.
The current total cost of pension relief to the Exchequer is £42.7billion.
Just under £23billion of this is relief on income tax.
Express.co.uk has approached the Treasury for comment.
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