HMRC last minute pension changes branded a 'shambles' as Lifetime Allowance ends
manchestereveningnews.co.ukHM Revenue and Customs has come under fire for making last-minute alterations to its new pension tax system, which has scrapped the Lifetime Allowance for a lower limit on lump sum payments - with the fixes and changes made to the system just days before it was due to be implemented described as a 'shambles' by an industry expert.
The changes to the pension system, among the largest in more than a decade, will end the tax-free £1,073,100 Lifetime Allowance and replace it with a tax on pension lump sum payments over an initial tax-free £268,275.
However, these changes were implemented in a short timescale, with the measures passing into law in February as part of the Finance Bill - forcing HMRC to push out updated guidance just a day before the new rules took effect (April 6).
With little information about what does or does not qualify as a lump sum, HMRC have now also recommended that people do not change pension plans until the dust has settled.
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