Budget 2023: Jeremy Hunt Has Handed A Huge Tax Cut To The Rich
File photo dated 26/01/18 of money. Gender differences in pension incomes could persist for decades to come, according to a report. Gaps are driven by differences in labour market patterns, which particularly open up after people have children, the Institute for Fiscal Studies (IFS) said. Men and women reaching the state pension age now have similar state pension incomes, according to researchers. Issue date: Wednesday March 8, 2023.
Jeremy Hunt has been accused of handing a huge tax cut to the rich by shaking up pension rules.
The chancellor used his first Budget to announce that high-earners will be able to plough more money into their retirement pots without having to pay more money to the taxman.
He said he was increasing the so-called annual tax free allowance from £40,000 to £60,000.
And in a major surprise, he also announced that he was going to abolish the lifetime allowance, which is currently £1 million.
The changes are aimed at encouraging more over-50s to stay in work rather than retiring to avoid higher tax bills.
Hunt said: “These changes will stop over 80% of NHS doctors from receiving a tax charge, incentivise our most experienced and productive workers to stay in work for longer and simplify our tax system, taking thousands of people out of the complexity of pension tax.”
But Labour pointed out that the tax cut would only benefit the very wealthiest in society.
Responding to the Budget in the Commons, Keir Starmer said: “We needed a fix for doctors, but the announcement today is a huge giveaway to some of the very wealthiest.
“The only permanent tax cut in the budget is for the richest 1%. How can that possibly be a priority for this government?”
A Labour source told HuffPost UK: “It’s a bad look for your only budget surprise to be a very very big tax break for the very very richest.”
Sharon Graham, general secretary of Unite, said: “Today the Chancellor claimed that this was a budget for growth to benefit Britain. In real terms, it’s tax cuts for the rich and powerful and little reward for workers.
“This economic system is not only broken, it’s rigged and once again workers are paying the price.”
Andrew Harrop, general secretary of the Fabian Society, said: “The chancellor did nothing to put extra money into the pockets of low and middle income households.
“Instead of acting to address the country’s unprecedented cost of living crisis, Mr Hunt instead chose a pension tax giveaway for the wealthy. That will be a bitter pill to swallow for people struggling to feed their families.”
Treasury sources insisted the tax cut was about keeping the “most experienced workers” in the labour market for longer.
They cited figures from the Royal College of Surgeons that found 70% of respondents reduced their hours due to the government’s current pension tax rules.
Sources said the chancellor did not want the current rules to lead to “fewer doctors” in the labour market and that this was the “quickest and most effective way” of keeping them in the NHS.