A Shropshire Accountant has backed calls to simplify the “overly-complex” way pensioners are taxed.
Keith Winter, from Dyke Yaxley Chartered Accountants, in Old Potts Way, Shrewsbury, says the Office of Tax Simplification has the right idea when it comes to changing the rules.
“The OTS has now completed the first stage of its review into the pensioner taxation system and they described the current structure of taxing pensioners as a ‘maze of special tax rules and unfamiliar forms.’
“This overly-complex system is causing older tax payers increasing problems and it’s time for this issue to be dealt with.
“I hope the review will help to create a simpler tax system which means pensioners can deal with their responsibilities more easily.”
The initial report from the OTS highlights key areas of complexity including the age-related and married couples allowance, and the taxation of savings.
And in their summary, which has been reported to the Chancellor of the Exchequer, the OTS recommended a further review of “convuluted” PAYE forms and tax administration.
John Whiting, Tax Director for the OTS said: “Too many people find the tax system gets more complex as they get older.
“Many of the issues we have highlighted 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 this interim report helps stimulate a debate on pensioner taxation.”
A second stage of the OTS review will now begin to look at the issues in more detail and to make specific recommendations on how the system could be improved. It’s findings are likely to be published at the end of the year.
Dyke Yaxley’s Keith Winter