TaxHelp For Older People: Tax needn’t be taxing…

This guest post is by TaxHelp for Older People (TOP), a charity offering free tax advice to older people on incomes below £17,000 a year. The Helpline number is 0845 601 3321.

TaxHelp for Older People

Why, you growl, does tax have to be so complicated? Do you feel a strong urge to put a brick through the television screen when you hear that line?

Well, a lot of the answer lies in history. We have income tax because it was introduced as a temporary tax over 200 years ago to help defeat Napoleon. We have a tax year which strangely runs from 6 April to the following 5 April because we lost 11 days in changing the calendar from the Julian to the Gregorian in the 18th century (and there were riots because people thought they were going to die 11 days earlier).

We have a Pay As You Earn system set up during the Second World War when the husband worked at the same company a mile down the road for 50 years while his wife stayed at home, made steak and kidney puddings and did the laundry on Mondays (and only 25% of the population paid tax – halcyon days).

Nowadays, the husband has had 9 different jobs in his working life and ends up with 4 different pensions plus his state pension, and the wife stopped paying the married women’s stamp and gained state pension entitlement in her own right, and has been able to join company pension schemes.

We have a tax system where successive Chancellors have added, subtracted and tweaked without a radical overhaul of the structure, resulting in complicated taxation.

We pay tax on working hard but not for winning on the horses, we pay different rates of VAT depending on how frail we are, we get relief for being married but only if we are ancient enough, we pay different rates of tax on our savings depending on how impoverished we are, we get allowances for being blind but benefits for being arthritic, our personal allowances vary according to both our age and our level of income, we pay our taxes through PAYE or self-assessment – or both, the rates of tax wander from 0% to 60% via 5, 10, 18, 20, 22.5, 28, 30, 32.5, 40, 42.5, 50 & 55 and that’s ignoring the disguised tax called National Insurance Contributions

Still keeping up? Good, because the Government have set up an Office of Tax Simplification (OTS) to examine taxation and make recommendations for simplifying the system.

Better, because the OTS would welcome thoughts and contributions from you, however heretical, to assist their deliberations.

The Office is currently looking at pensioner issues, so now is the time for a bit of Grey Power. Go on, put quill to parchment or digits to keyboard.

Now is your chance to make a positive contribution to making tax less taxing. You can e-mail your ideas direct to them on ots@ots.gsi.gov.uk or if you prefer, you can send them to us via the post at TaxHelp for Older People, Pineapple Business Park, Salway Ash, Bridport, Dorset DT6 5DB and we will undertake to forward them to OTS.

3 thoughts on “TaxHelp For Older People: Tax needn’t be taxing…

  1. I am the Scottish Regional co-ordinator for the charity TaxHelp for Older People (TOP) and must convey my thanks to Age Scotland for posting this article on their “Blog”. In addition to making older people aware of the pensioners tax review currently being undertaken by the Office of Tax Simplification the article also promotes the free tax advice available from TOP.
    I am meeting up with two representatives from the Office of Tax Simplification this coming Monday 12 December 2011. I would therefore welcome anyone’s views on those areas of the tax system which they consider are unnecessarily complex and which cause the most uncertainty. All comments received will be drawn to their attention at the meeting in question.

  2. the goverment are trying to take working people with less than 10k out of the tx bracket…what about the state pensioner who has a small pension apart from the state pension it is still taxed and they are still under 10k…It is an unfair world you work all your life and pay your way…yet if you were a down and out you would get everything and not pay tax…I think Guy Fox had the right idea…the mp’s dont know what it is like to be a poor pensioner…They more thanlikely spend more on a meal out then we have to live on in a week. Christmas is just a struggle…like every week.

  3. I agree that times are really hard for pensioners and like you many have to meet the ever increasing cost of basic necessities like food and fuel from annual incomes of less than £10,000.
    Whilst of little consolation the current personal tax allowance for pensioners aged 65 to 74 are to rise from £9,940 to £10500 & for those aged 75 & over from £10,090 to £10,660. These increases will apply for the tax year 2012/2013. Consequently anyone with taxable income below these levels should not be paying any tax on this income. Full details at http://www.hmrc.gov.uk/rates/it.htm
    There will still however be many women who are currently in receipt of their state pension who will only qualify for the basic personal tax allowance because they are under age 65. The current personal tax allowance for all those under 65 is due to be increased from £7475 to £8105 for the tax year 2012/2013. Furthermore as this is the personal allowance which the coalition government plan to increase to £10,000 any such increases will also benefit those women who are in receipt of their state pension but are still aged under 65.
    Anyone in any doubt as to whether or not they are paying the right amount of tax can phone Tax Help For Older People on 0845 601 3321 or 01308 488066 for a ‘Tax Health Check’. The charity provides free tax advice to older people on household incomes below £17,000.

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