Clause 173 - Personal pension arrangements: limit on contributions
Finance Bill
9:30 am
Mr John Healey (Economic Secretary, HM Treasury; Wentworth, Labour)
The clause makes some technical amendments to personal pensions legislation to ensure that it works as originally intended. The original intention behind the legislation is clear, well understood and generally accepted by the pensions industry and by scheme members. Some have claimed, however, that the legislation does not successfully apply the earnings cap limit to contributions paid by a scheme member's employer. To put that matter beyond doubt, the clause makes some minor changes to the wording of the legislation, to take effect from Budget day.
On the hon. Gentleman's second point, a new cap is not being imposed. The old cap, which has been in place since 1989, limits the tax privileges available to people with high incomes. The purpose of the clause is to ensure that the cap cannot be avoided. The system will be simplified from 2004, when reliefs will be capped in a different way.
Question put and agreed to.
Clause 173 ordered to stand part of the Bill.