All-party Parliamentary group on taxation chair Ian Liddell-Grainger says the Government should refrain from making any changes to pension tax in the Budget and should instead hold a formal review.
There has been speculation about changes to tax relief and contribution limits in next week’s Budget but Liddell-Grainger warns Chancellor George Osborne should not make announcements based on “guesstimates”.
He says: “George might be right but he might be wrong. We do not know, he does not know. What he will do will be based on his best guesstimate. I would get a brighter spark than I to look at this whole thing in a formal review. Any changes the Government announces will not come in overnight so we should take the time to get it right.”
Liddell-Grainger says the review should look at how much access people should have to their funds. He says: “The Government should be looking at the whole way we use pension funds in a much more formal way than it is at the moment, which is quite piecemeal.”
Alan Seward Financial Solutions director Matthew Rich says: “It is sensible to have a cohesive plan rather than tweaking here and there.”
The Liberal Democrat proposal for an annual 1 per cent tax on property worth over £2m is unlikely to make it into Osborne’s Budget speech, according to Liddell-Grainger.
He says: “The mansion tax is just Vince Cable’s pet and there is there is too much of a backlash even from his own party.”