Initial findings of the review of pensioner taxation have been reported to the Chancellor of the Exchequer and published today by the Office of Tax Simplification (OTS).
The independent OTS is currently reviewing pensioner taxation, looking at the broad aspects of the tax system that affect pensioners, and identifying ways that this overly-complex part of the UK’s tax system can be simplified.
Today’s interim report concentrates on identifying the areas of the tax system that cause older taxpayers the most problems. It offers few immediate recommendations for change, but instead highlights problem areas and possible directions of travel for the future of the review. The areas to be reviewed further include the age related allowances, the married couples allowance and the taxation of savings, as well as the convoluted PAYE forms and the administrative processes pensioners face.
This report sets out in detail the full scale of the task facing pensioners who have to navigate through a maze of special tax rules and unfamiliar forms. The OTS will now be looking to explore both technical and administrative simplifications in these areas before making final recommendations to the Chancellor.
John Whiting, Tax Director for the Office of Tax Simplification said:
Too many people find the tax system gets more complex as they get older. Many of the issues we highlight are well known but we have taken our time to consider and document the full extent of the current system, taking into account fully the concerns and complexities, before we make any solid recommendations.
Our report floats a number of possible ways forward to mitigate the difficulties pensioners face. We haven’t shied away from the big issues and I hope that this interim report helps stimulate a debate on pensioner taxation. We are aiming to make final recommendations that will mean pensioners can have a better understanding of a simpler tax system, and can deal with their responsibilities more easily.
The OTS has gathered evidence through meetings and roadshows throughout the UK. This review will have input from pensioners, tax advisers, and representative bodies, but we welcome views on our work from anybody with an interest and thoughts on these findings can be sent to the OTS.
The interim report on the pensioner taxation has been published today on the website: http://www.hm-treasury.gov.uk/ots.htm, and the final report will be published later in the year. The OTS has also published a final report on simplification of approved share schemes today and a final report (in three parts) on small business tax last week.
Notes to Editors
- The independent Office of Tax Simplification was established on 20 July 2010 to carry out reviews in order to provide expert advice to the Chancellor on options to improve and simplify the UK’s tax system.
- The OTS team is led by Chairman Rt Hon Michael Jack, and Tax Director John Whiting and has a staff drawn from HM Treasury, HM Revenue & Customs and secondees from the private sector. Details and biographies are available on the OTS website.
- OTS started its work in September 2010 and initially took forward two reviews: tax reliefs and the first stage of small business taxation (which focused on the IR35 review). Since then, the OTS have issued a further report on the review of small business which made recommendations for a simpler tax system for the very smallest businesses, and is currently carrying out a review of pensioner taxation.
- Recommendations will be set out in a final report on pensioner taxation. No timetable has been set for this, but the OTS anticipates completing the review by Budget 2013.
- Thoughts and comments on the OTS pensioner review can be sent to: email@example.com
Issued by Office of Tax Simplification Press Office
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