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In order to better align outcomes for low-earning individuals saving in pension schemes, regardless of how their scheme administers pensions tax relief, a system will be introduced to make top-up payments directly to low-earning individuals saving in pension schemes using a Net Pay Arrangement from 2024-25 onwards. The government will also invest in HMRC to modernise the administration of Relief at Source, and deliver a data driven tax administration system for Relief at Source pension schemes, employers, and members.
This call for evidence was announced at Budget 2020.
The government is concerned about the potential for a low-earning individual’s take-home pay to be affected by the method of pensions tax relief operated by their pension scheme. The government is keen to explore this issue further to understand what deliverable options for change may exist.
This call for evidence seeks views on how certain proposals could be adapted to address the discrepancy in outcomes for low earners in a way that is consistent with the government’s principles for reform. Any other proposals around the administration of pensions tax relief would also be welcomed.