NEWS • VIEWS • INFORMATION • ADVICE
Reduction in tax relief on pension contributions
The Annual Allowance (AA) is the HM Revenue & Customs (HMRC) limit above which an individual’s total ‘input’ into any pension scheme will be taxed. The AA was initially set at a level where the vast majority of NASUWT members would not be affected. However, the AA was reduced from £255,000 to £50,000 pa from April 2011.
As a result of this change, which the NASUWT objected to during the consultation process, an increase in a teacher’s contributions to the Teachers’ Pension Scheme (TPS) due to promotion or a significant increase in pay could be subject to an unexpected tax charge.
The complex way in which the AA operates and teachers’ pension contributions are calculated means that any liability will depend on the length of service and the growth in a member’s pension benefits during the year.
It is the responsibility of the individual to notify HMRC of any liability to the AA charge by 31 January following the end of the relevant tax year but members will be able to carry forward any unused allowance from the previous three years to mitigate the effect of increases in pay that could breach the AA.
There is a bulletin explaining the AA in detail on the TPS website at: www.teacherspensions.co.uk/bulletin/article19.htm
and a calculator at www.teacherspensions.co.uk/resources/calculators.htm#anchor6
to help members investigate whether they have exceeded, or are likely to exceed, the AA.
Further guidance from HMRC can also be found at www.hmrc.gov.uk/pensionschemes/annual-allowance/reduced.htm
If teachers are still concerned that they may incur a tax liability as a result of the reduced AA, they should contact their tax office or seek independent advice from a financial adviser.
International call to protect education
The NASUWT has led a global call for action to ensure education is not made the scapegoat of the global financial crisis.
Poorer countries are being forced to close schools and cut teachers’ jobs and pay as they struggle to cope with the impact of the worldwide recession, the NASUWT has told an international gathering of education trade unions. Teachers and other public service workers are being denigrated and trade unions attacked by governments worldwide.
The poorest are unfairly being made to pay the price for the global financial crisis, the Union told delegates in a motion to the Education International World Congress, held in South Africa last month.
Trade unions across the world must work together to fight this attack, the Union stated, and put further pressure on world leaders to honour their commitments to achieve universal primary education for all children by 2015 and ensure all children have equal access to both primary and secondary education. The majority of the 69 million children worldwide currently missing out on school are girls and the NASUWT warned that without concerted action, the promise to eliminate this gender disparity would be broken.
The introduction of a financial transaction tax for global financial institutions would ensure these commitments could be met and could resolve the need to make deeply damaging cuts to public services. The NASUWT’s motion commits Education International and its affiliates to campaigning for the introduction of a tax.
A full report on the Education International Conference will be in the next edition of Teaching Today.
Global Election success for Deputy General Secretary
Dr Patrick Roach, NASUWT Deputy General Secretary [below], has been successfully re-elected to the Executive Board of Education International (EI), the world’s largest federation of trade unions.
Dr Roach topped the ballot and will remain a member of the Executive Board for another four years. The announcement was made at EI’s World Congress, which took place in South Africa last month.
EI represents 30 million teachers and other education employees in 170 countries around the world.
Dr Roach’s re-election to the Executive Board is a highly prestigious achievement and allows the NASUWT to continue its work to promote and represent the interests of teachers on a global scale.
(Photo of Dr Patrick Roach)
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