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BUDGET 2009 NEWS: Consult IFAs to understand tax changes, say experts

Advisers are more important than ever in helping consumers understand the UK tax system after Chancellor Alistair Darling announced a series of new tax changes today, says Unbiased.co.uk.

Unbiased.co.uk says high earners are facing a triple whammy of new taxes therefore now is the time to seek financial advice and reduce the tax burden.

Spokesman Richard Winder says: “Today’s announcements by the Chancellor are no doubt a tax-Budget to remember, adding a significant additional tax burden. There are some simple tax efficient measures people can take and seeing an IFA is often the first step to help reduce people’s tax burden.

“An IFA can help make sense of not just the current tax system but also any changes announced today and guide consumers through the tax maze to find the best suitable options for their personal finances.”

Intelligent Pensions technical director David Trenner says today’s budget provides excellent news for those IFAs advising clients on pension contributions.

He says “Those earning more than £150,000 from 2010, but who are currently earning less than £150,000, will definitely benefit if they give up a salary that would have been taxed at 50 per cent in return for pension contributions. The maximum contribution that remains within the annual allowance will be £255,000 from April 2010, so anyone whose earnings would otherwise rise to £400,000 a year could avoid the new tax completely.

“This might be an extreme example, but there is no question that the need for specialist advice will be great. And to think that some us thought that pensions simplification might remove the need for advice altogether.”

Towry Law chief executive Andrew Fisher says today’s tax changes further emphasises the need for savers to review their financial position.

He says: “These tax changes will require many people to review their financial plans. Any action taken to tax pension savings is a retrograde step. In this time we need to encourage saving for retirement for all people.”

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