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Fat cats in the city avoid pension tax

The UK government recently announced a number of changes to the pension system which would effectively see an increase in taxation for large value contributions to pension schemes which many thought would hit the high earners in the City. However a report by the Guardian has today confirmed that a significant number of top earning directors in the UK opted to receive their pension fund contributions in cash rather than being hit by the 50p in the pound tax rate.

While the UK authorities appear keen to increase tax income as much and as quickly as possible it looks as though a number of their schemes are in effect window dressing. The move was announced by Alistair Darling sometime ago in a blaze of glory amid confirmation that the Labour Party was returning to its roots. However, as the UK government looks to reduce the ongoing UK budget deficit it seems as though many of these new taxation schemes have not been well thought out and indeed may backfire in due course.

As ever, it seems as though the very rich in the UK will find a way around tax increases while those in the middle classes and lower classes are hit with an ever-increasing cost of living.

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