Employees will no longer be hit by a tax bill for financial advice as a benefit in kind in a move which has been described as a huge boost for IFAs in the corporate market.
The Budget has acknowledged the value of advice in the workplace by allowing information and advice for workers to be exempt from being a taxable benefit up to £150 a head per employee per year.
Pension IFAs say the move marks a recognition by the Treasury of the value and importance of advice in boosting retirement saving.
Corporate pension advisers say until now employers have been discouraged from offering advice to their employees because staff have been taxed as receiving a benefit in kind.
Exempting advice for staff from tax means advice becomes more appealing and gives IFAs a story to tell clients when pitching for new business.
The change will also affect the choice of fees or commission as advice paid for through commission has been favoured by not being subject to the benefit-in-kind rules.
Momentum pensions specialist Mark Stopard says: “This is a big step forward that means we can help more employees plan for their future. I would like the Informed Choice consultation to continue promoting the fact that advice is the best way to get the message across about pensions.”
A&B head of pensions Michelle Cracknell says: “It is fantastic that they have identified the workplace as being the place to get advice out there. The Treasury is moving in the right direction although the figure of £150 is a bit low.”