Taxing times for our struggling pensioners
THERE have been warnings a-plenty this past month about the new tax codes issued by Her Majesty's Revenue and Customs to every tax payer around this time of year.
Lots of you already may be foaming at the mouth over your own missive.
Scrutinising my own I could see that I was set to pay more. And why would this be, I asked the young lady at the end of an HMRC telephone line?
Like everyone receiving their state pension wasn't I to receive the grand sum of 2 something a week? Was this going to be taken away in tax?
Yes, it seems. That pittance which might have bought me a pound of Dromona butter is going to be processed to me but I won't really get that amount – if you see what I mean.
It will come less 20 per cent tax - an amount that will be taken off my private pension.
So, this Government is so desperate for money that it needs another 40p a week from me and no doubt millions of others.
I suspect my private pension will be raided even further; my SERPS pension is also going to be raided in the next month. Sorry. Not raided says the Government, but frozen.
What does frozen mean I asked HMRC? When will its inflation rise be reinstated? `You'll have to take that up with the Government,' she said.
I found out this week that by not increasing the SERPS pension (those who are not of pensionable age will know this as the second State Pension) the Government will save more than 350million in 2010 / 2011.
Put like that it seems a lot of money.
In reality it's a pittance compared to the size of the taxpayers' bailout to the banking sector – an estimated 140bn according to the Financial Services Authority.
It wouldn't even dent it but pensioners, even those on the lowest incomes, are being shafted nevertheless. Which is why I get so cross when this Government keeps telling the working population that pensioners are costing the state a fortune and the cost is to triple in 10 years.
I often wonder how they work this out; after all people are having to sell their homes to pay for care.
Not only are these people having to pay over the odds for shoddy, impersonal care in a nursing home, they're also subsidising those who get the care free i.e. those who've never paid for anything in their lives and have lived mostly off the state.
So for every person in a nursing or residential home who is paying their way, you can be sure they're also paying for those who don't or can't pay.
Yet the Government refuses to talk about this, or even admit that this is how they 'fund' care for the elderly. It's shameful and deceitful.
Now we find out that the elderly, for the year 2006 / 07, were paying around 83 per year too much tax on savings income, and for all I know are probably still overpaying.
Multiplied by the 2.4 million pensioners affected, this comes to an overpayment of 200 million all because the tax system is so complicated. The shambles has led to the Commons public accounts committee calling for better treatment for older taxpayers which is hardly a rap over the knuckles.
The MPs, according to a report, also found that HMRC records were wrong on individual pensions that led to incorrect tax bills, consequently leading to 1.5million older people overpaying 250 million. Heaven preserve us from official incompetence.
I have always found HMRC to be diligent in paying back what has been overpaid, but how come so many mistakes are being made in the first place? And how many older people even have the knowledge to know if the amount claimed off them is wrong?
How much of this overpayment still ends up in Government coffers? I hate to think.
I try to stay calm when dealing with tax people – after all, the person on the phone isn't making the rules – but Himself is a different animal altogether.
He went ballistic when he discovered he had a new tax code which had wiped out his personal allowance (currently 6,475).
His code was BR, one he hadn't encountered before. I rummaged through various papers and found an interpretation. Scares like this are blood-pressure inducing.
In fact, how many pensioners have collapsed with the stress of dealing with officialdom in incompetent mode.
HMRC are blaming mistakes like these on the installation of a new computer system. Why don't they give us all a break and go back to simple pen and paper assuming they have staff who can do simple arithmetic.
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Thursday 24 May 2012
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