By Edie Bourne
Doctors are among thousands of pension savers generating record payments to the taxman by breaching strict yearly limits.
HM Revenue and Customs (HMRC) revenue from ‘annual allowance’ breaches hit £812m in 2017-18, a rise of at least 40% on £517m in 2016-17. The figure was £143m in 2015-16.
Some 26,550 pension savers reported a breach of the annual allowance rate – up by a staggering 11,000% in a decade. Ten years ago, just 230 people triggered the extra tax charge. The average extra tax bill is now £30,584 per person.
The annual allowance limits the amount of tax-free pension savings which can be accrued each year. As well as the standard allowance, which has fallen from a peak of £255,000 in 2011 to just £40,000, a ‘tapered’ annual allowance was introduced in 2016.
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