Chancellor could slash pension tax relief for top earners

NEW Chancellor Rishi Sunak is believed to be considering a crackdown on pension tax relief for higher earners in his first Budget, which will go ahead as planned on March 11.

After the shock resignation last week of Sajid Javid, it had been thought the annual financial statement would have to be delayed.

But yesterday his newly appointed replacement said he was ‘cracking on with preparations’ for the Budget, claiming it would ‘deliver on the promises we made to the British people’.

Plans for a ‘mansion’ tax and a nationwide revaluation of homes have reportedly been dropped after a backlash from Tory MPs. But it is understood that Mr Sunak, pictured, is considering cutting pension tax relief for higher earners amid concerns that the present system is ‘perverse’.

Currently, higher-rate taxpayers enjoy 40 per cent tax relief on their pension contributions – extra money that goes into their pension pot rather than to the Government as tax – compared with 20 per cent for lower earners. It is believed that the Treasury has drawn up plans that will cut the rate for higher earners from 40 per cent to 20 per cent in a move that would raise £10billion a year and create a level playing field.

Yesterday Mr Sunak tweeted: ‘Cracking on with preparations for my first Budget on March 11.

‘It will deliver on the promises we made to the British people – levelling up and unleashing the country’s potential.’