Clients prepare for tax changes

Financial advice firm deVere Group has noted “a considerable upswing” in clients looking to mitigate the impact of potential tax changes in the next Budget.

Founder and chief executive Nigel Green said: “There are still many uncertainties triggered by the global health emergency and the economic fallout from it. But one thing that does seem pretty certain is that taxes are going up to fund the Covid-19 black hole in the government’s coffers.

“The government needs to urgently and sustainably boost the economy and protect jobs, so will not want to further burden businesses.

“Instead, it can be expected that it will be higher earners who take on this burden in the form of potentially higher personal taxes and/or the reduction of existing tax relief perks.”

“It will be higher earners who take on this burden”

He added: “It is almost inevitable that pension tax relief will be a target as the government looks to plug gaps in November’s Budget.

“Many high earners are, as a result, considering their available options. As it’s likely the pension contribution relief for those on higher incomes will be reduced, an increasing number of people are now mulling making a larger one-off contribution before the Budget, to benefit from the higher tax relief whilst they still can.”

Such a move would underscore how successive UK governments have seen retirement savings as easy, “low-hanging fruit” to be raided, Mr Green said, adding: “Governments need to be encouraging people to save.”