PENSIONS AND TAXATION UPDATE
The issues relating to taxation of the Annual Allowance have been outlined extensively at previous meetings. Whilst the Associations traditional position was that taxation was a personal matter and that individual members should be responsible for their own affairs, the greater the impact of the Annual Allowance taxation and the reduction to an annual allowance of £40k has necessitated a review of this position.
It was also our view that there would be little public sympathy for persons on our range of salaries and pensions to complain about our lot in this respect and as a result the Association did not protest at the introduction of this tax.
Recently however this position has altered and a number of issues have been highlighted as a concern:
- The taxation was not designed for Superintendents and those for whom it was intended have moved to different schemes;
- There is no ability for members to move their contributions elsewhere and reduce the tax burden;
- Members can be taxed merely by moving along the incremental scale;
- It is a tax on success;
- There is no process to pay back over taxed individuals; and
- Some individuals may not seek progression due to tax implications;
For these reasons we have undertaken some lobbying of politicians with some expression of sympathy received. Ms Alison McInnes MSP has written to the Treasury on our behalf outlining our concerns and Mr Graeme Pearson MSP has suggested that Holyrood may be able to address this issue in the long term when taxation powers are there.
We have also established that these issues have not been as prevalent in England and Wales as yet and therefore they are not yet at the stage whereby they wish to engage in lobbying. Initial contact has also been established with the fire service in this regard.
A further pension seminar is being planned for Aberdeen in November. It is hoped that this will include our Tax advisor and the force pension’s expert along with a financial investment company and Chief Superintendent Tim Jackson our national pension lead who will be able to provide information to new members on the CARE scheme.
At the England and Wales Superintendents Conference it was suggested that the way we negotiate for pensions in the future may require to alter due to the fact that less of our members may wish to do a full police service…early retirement and career breaks etc. may feature.