Budget Representation 2020: Net Pay Action Group
LITRG is part of a group of leading pensions and tax experts calling on the Government to act quickly to deliver its manifesto promise to fix an unfair tax flaw. This flaw means around 1.7 million low-income workers (mostly women) are being unfairly charged 25 per cent more for their pensions as a result of the way their employer pension scheme operates.
The 2019 General Election Conservative manifesto stated: “A number of workers, disproportionately women, who earn between £10,000 and £12,500 have been missing out on pension benefits because of a loophole affecting people with net pay pension schemes. We will conduct a comprehensive review to look at how to fix this issue.”
In its 2020 Budget Representation, the Net Pay Action Group is calling on the Government to provide a firm timeline for its pledged review of the system and commit to implementing a solution. It is urging the Government to consider the action group’s proposed solution of a system that would allow HMRC to identify which savers, earning below the income tax threshold, have contributed to a net-pay scheme. HMRC could then provide that government savings incentive, worth 25% of each low-paid worker’s pension contribution, through an existing process.
The full text of the representation can be found here: Net Pay Action Group - Budget Representation 2020
Kelly Sizer