Paul Seal

Pension premium shock ahead

The forthcoming changes to pension premium relief will have an impact on subsequent self-assessment payments on account.
In effect the introduction of basic rate relief at source will result in an increase in both balancing and payments on account whilst there is a transition to the new system. The problem will be that tax relief as premiums are paid will be overlooked by our clients whereas any increase to balancing payments will always come as a complete shock!
The following illustrates the concern: