Finance Bill — Pensions — Report Prior to Repeal of High Income Excess Relief Charge — 15 Jul 2010 at 16:15

The majority of MPs voted against a proposal which would have prevented ministers using secondary legislation (which uses executive power granted by an initial Act) to repeal the high income excess relief charge without first publishing a report detailing any proposed replacement and assessing its impact.

The high income excess relief charge is a reduction in tax relief -essentially an additional tax- on pension savings for those with a gross income of more than £150,000 in a year. It is provided for in Section 23 of the Finance Act 2010 which refers to the detailed rates and thresholds etc. within Schedule 2 of the act.

The amendment being voted upon was proposed by opposition MP Angela Eagle, it read:

• page 3, line 9, at end add-
• (4) An order under this section may only be made once the Treasury has published a report, including-
• (a) the outline for the proposed replacement arrangement for the provisions contained in Schedule 2 to the Finance Act 2010;
• (b) a distributional analysis showing the likely impact of the proposed replacement arrangement; and
• (c) the revenue implications of the proposed replacement arrangement.'.

The additional section was to be added at the end of Clause 5 of the Finance Bill 2010. The clause was the provision giving ministers the power to repeal the high income excess relief charge via secondary legislation.

This vote was immediately followed by a vote on if clause 5 should remain in the bill at all

• [1] Consult this summary of the High Income Excess Relief Charge by tax specialists BlueFin Group.
• [2] On the 9th of December 2010 the power to repeal the High Income Excess Relief Charge, as set out in Section 23 of the 2010 Finance Bill, was used by the Government.
• [3] The Government has set out its proposed policy for the future of pension taxes in its draft 2011 Finance Bill.

Debate in Parliament | Source |