News: September 2011
Review of taxations of pensioners
This is often seen as overly complex, with many pensioners subject to PAYE before retirement but self-assessment afterwards when they may have several small sources of income that may or may not need tax deducted. A perennial problem indeed! It is not the amount of income that makes somebody’s tax affairs complex – rather it is the number of different sources.
The Office of Tax Simplification (OTS) is to conduct a review of the system of pensioner taxation and make recommendations on how to simplify the tax system and ease tax administration.
This article is not advice – instead these are pointers designed to help you navigate your, way through your tax affairs. You should not take any action – or refrain from any action – as a, consequence of anything we discuss above. Special advice is required if considering taking a dividend.
The OTS will provide an initial report by Budget 2012 that:
- Examines evidence and identifies the areas of the tax system that cause the most complexity and uncertainty for pensioners.
- Identifies how these issues vary within the pensioner population.
- Explores what changes could achieve simplification and what the wider implications of these might be.