Pension tax and share schemes to be simplified
The Office of Tax Simplification (OTS) has announced that it is next to direct its attention to pensioners’ tax and share schemes.
In addition to its work on streamlining the small business tax regime, the OTS will be reviewing the complexities faced by pensioners, especially those on low incomes and with earnings from several sources.
Also under scrutiny will be share schemes, with particular focus on harmonising the rules and making the arrangements easier to use.
In a letter to the Secretary to the Treasury, David Gauke MP, Michael Jack, chairman of the OTS, wrote: “For the estimated 5.6 million people of pensionable age paying tax, this area is widely acknowledged as causing too many problems for a group, some of whom are the least able to cope with them.
“The OTS will be looking for ways in which pensioners’ tax affairs can be dealt with in a much more straightforward way – especially for those with multiple sources of income.
“As for Share Schemes, this is an area that businesses have regularly cited to us as an area with too many complexities and traps for the unwary. So we will be looking to see if there is scope to harmonise rules and make arrangements simpler to use.”
The aim is to come up with recommendations in time for Budget 2012.
The OTS was set up in July 2010 to provide expert advice to the Chancellor on ways of improving the UK’s tax system.
So far, it has conducted two reviews on simplifying tax reliefs and small business taxation.