Income Tax is usually payable on taxable income above a taxpayer’s tax-free threshold. However, the rate at which it is payable will depend on the band. For instance, the standard Personal Allowance means that the first £12,500 of taxable income is tax-free. Income ranging between £12,500 and £50,000 comes under the Basic rate band, and the tax rate is 20 per cent.

Higher rate tax payers – meaning taxable income between £50,0001 and £150,000 – will see this portion of taxable income being taxed at 40 per cent.

The Additional rate band applies to taxable income greater than £150,000, and is subject to a tax rate of 45 per cent.

During the campaign for the leadership of the Conservative Party, Boris Johnson pledged to raise the threshold for paying higher-rate income tax from £50,000 to £80,000.

This does not apply in Scotland, where there are different tax bands.

And, while this may be a welcome move for those with higher income than others, it seems that it could have an impact when it comes to pensions tax relief.

Anyone with earnings, after deducting pension contributions, of between £50,000 and £80,000 would lose Higher rate pension tax relief, and instead receive Basic rate relief instead, pension provider Aegon said.

Currently, Basic rate taxpayers get 20 per cent pension tax relief, while Higher rate taxpayers can claim 40 per cent pension tax relief.

Meanwhile, Additional rate taxpayers may claim 45 per cent pension tax relief.

According to calculations by pension provider Aegon, if these higher rate taxpayers were lifted out of the 40 per cent tax band, they would therefore lose out on the pension perk – potentially costing thousands of pounds per year.

Instead, they would get relief at the Basic rate pension tax relief instead.

Steven Cameron, Pensions Director at Aegon said: “Increasing the higher rate income tax threshold from £50,000 to £80,000 will mean individuals earning over £50k will no longer pay 40 per cent tax on that band of earnings.

“This will no doubt be very welcome and for those earning £80,000, could save them £6,000 a year in income tax.

“However, it also means those same individuals paying into pensions will no longer qualify for the higher rate tax relief which currently means a £5,000 pension contribution costs them only £3,000 after allowing for income tax savings.”

Mr Cameron continued: “If these proposals are implemented, building up the same pot at retirement will cost them £4,000 after tax savings, or an extra £1,000 a year.

“While some may be tempted to keep the cost to them at £3,000, this will severely impact their ultimate retirement pot.

“It would mean the amount going in after adding on Government tax relief would be £3,750, a quarter less than the previous £5,000.

“This also means the pension fund built up from future contributions and the income it could pay will be a quarter less.

“If Boris does implement the increase in the higher rate tax threshold, the overall impact will still be an increase in after tax pay.

“While those contributing to pensions will see less of an increase, we hope this will be recognised as a price worth paying to keep retirement plans on course.”

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