Recommendation 16

We asked the exchequer departments when they would take action on the issue of workers not receiving pension tax relief.27 HM Treasury said the Government recognises the different impacts of the two systems of paying pension tax relief on pension contributions for workers earning below the personal allowance. It referred to the Government’s announcement in Budget 2020 that a call for evidence would be published in spring 2020 on this subject. The call was due to ask for views on how to address the different pension outcomes for lower earners, depending on whether their employer’s pension scheme used the net pay or relief at source method of tax relief on their pension 21 HMRC, Capital Gains Tax statistical tables, August 2019, Table 4 22 Budget Speech 2020, available at https://www.gov.uk/government/speeches/budget-speech-2020 23 Q51 24 HMRC, Personal pensions: contribution and tax relief statistics, October 2019 25 Written Evidence MTE0003 – Management of tax reliefs, Ruari Grant (Senior Public Affairs Associate, Standard life Aberdeen) published 10 June 2020 26 Royal London, New FOI reveals far more low-paid workers missing out on pension tax relief than previously thought, April 2019 27 Q49 12 Management of tax reliefs contributions.28 HM Treasury told us that in the light of COVID-19 the Government was considering the publication of this and other Government documents on a case by case basis. It planned to provide more information on the timeframe for publication of this call for evidence in due course.29 28 Net pay is where the employer takes pension contributions from an individual’s pay before it is taxed. Relief at source is where the employer takes pension contributions after tax and National Insurance has been taken from an individual’s pay. 29 Q 49, Letter from Beth Russell, Director General, Tax and Welfare, HM Treasury, 26th June 2020 and HMRC, Guidance – Pension schemes newsletter 118, March 2020; and HMG Workplace pensions Management of tax reliefs 13