Committee debates on Finance Bill 2020–2

The third sitting of the public bill committee’s debate on the Finance Bill started with cl 21: ‘Annual allowance: tapered reduction’. The financial secretary to the Treasury Jesse Norman explained that the clause amends the tapered annual allowance legislation on pension contributions in FA 2004 s 228ZA by increasing the maximum threshold income and adjusted income an individual can earn without their annual allowance being reduced (or ‘tapered’). The clause also decreases the minimum tapered annual allowance from £10 000 to £4 000.

Previously the allowance had adversely affected doctors in particular who found that taking on extra work and accruing extra pension entitlement meant they were worse off. Norman explained: ‘Raising the two thresholds at which the tapered annual allowance applies by £90 000 each is the quickest and most effective way...