Draft legislation recently issued by HM Revenue & Customs, which outlines its plans to prevent people from "recycling" the tax free lump sum they may receive upon retirement, have come under fire from UK savings provider Norwich Union.
Norwich Union has said the proposals would add unnecessary paperwork for claimants, which would probably require professional help to understand. It also raised concerns about the HMRC’s plans to administer a charge of up to 55% of the lump sums paid, should a claimant break the rules.
Norwich Union went onto suggest that the issue could be alternatively addressed by tackling recycling through the self assessment tax form and by ruling out the promotion of such activity by including it in the FSA Code of Business Rules.