Commenting on the publication of the National Audit Office’s report on the way HMRC handles the tax obligations of older people, South Norfolk MP Richard Bacon, a member of the Commons public accounts committee, said: “Many older people are paying more tax than they should.  On average, 1.5 million pensioners each overpay £171 in tax, equivalent to £250 million that the taxman should not be taking.

HM Revenue & Customs (HMRC) is taking £250 million too much from 1.5 million pensioners, who are each overpaying an average of £171.

“HM Revenue & Customs (HMRC) is struggling to get the taxation of older people right, mainly because the tax system is poorly equipped to deal with an older person’s multiple sources of income.  Many older people are also failing to claim any age-related tax allowances that they are entitled to.  An estimated 2.4 million pensioners have overpaid the taxman by around £200 million because they did not have their savings income paid gross.

“The UK’s population is ageing, so it is only going to get harder for HMRC to deal with the taxes of older people.   HMRC needs to work much harder to make the tax affairs of older people easier to understand.  This will help to cut the number of errors and ensure that pensioners claim the allowances they are entitled to”. 

23 October 2009
 

See also::
NAO REPORT: How HMRC deals with the taxes of older people

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