Last week the Public Accounts Committee (PAC) finally stated what the long suffering public (and staff of HMRC) have known for quite sometime, namely that the UK tax system is way too complex.
Specifically, HMRC's system for dealing with older people's tax affairs is too complex and leads to many people overpaying tax.
PAC estimated that 1.5 million older people have overpaid £250M of tax, and that HMRC does not know how many people miss out on the age related allowances that they are entitled to.
Edward Leigh, PAC chairman, said that HMRC's systems do "not cope well" with people's multiple sources of income (which are more prevalent as people become elderly).
PAC made a number of recommendations to HMRC:
- Establishing a clear plan by June 2010 to make the system simpler for older people and reduce errors
- Forecasting the growing numbers of older people and helping them with their tax affairs
- Accurately calculating how many people fail to claim their age-related allowances
- Providing people with a single document explaining how their tax code is calculated
- Provide a single point of contact for older people to get help in dealing with their tax affairs.
It is not just older people who find the tax system confusing.
However, given the fact that the country is bankrupt these recommendations will doubtless gather dust as there is neither the money nor the political will to implement them.
Tax does have to be taxing.
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"Too Complex..."
ReplyDeleteYour graphic could just as easily relate to HMRC's new penalties system which is equally unfathomable and unworkable.
Sorry, I thought this was the chart showing the conduct and discipline procedures.
ReplyDeletethey wont do anything as those in charge arent interested in providing a service only doing the bare minimum within their funding. if they tried to collect the 28 billion unpaid tax and not write off 11billion in uncollectable tax as they dont have the staff then these issues could be dealt with easily.they are just running the system into the ground so they can privatise it
ReplyDeleteAgree with 09:16.
ReplyDeleteExperienced staff have gone and they havnt bothered to invest in anyone to replace them.
Its a slow death to privatise the mess.
Already on the way to privatisation. They have been using IQQR & Eversheds on a trail basis for debt management.
ReplyDeleteI'm unsure how it is complicated. At 65 your allowance increases, at 75 it increases again. If however your total income is more than 22900 your allowances will be reduced (by 1 for every £2 you are over).
ReplyDeleteWhere is the complication?
I'm unsure how it is complicated. At 65 your allowance increases, at 75 it increases again. If however your total income is more than 22900 your allowances will be reduced (by 1 for every £2 you are over).
ReplyDeleteWhere is the complication?
So, Anonymous 23.30, you've sat in an IREC trying to explain this to an 80 year old have you?
I agree, too complex.
ReplyDeleteMy parents worked and so all tax was just done by employers. Now they are retired they have to deal with the Revenue.
The correspondence from the system is totally meaningless to them, but they cannnot talk to the same person twice so the one who was going to sort it out and expalin it not available, so they start again and again with the next person.
"I'm unsure how it is complicated. At 65 your allowance increases, at 75 it increases again. If however your total income is more than 22900 your allowances will be reduced (by 1 for every £2 you are over).
ReplyDeleteWhere is the complication?"
The complication lies therein if they're over 75 and married, getting married couple's allowance and needing to work out the right restriction to make sure the sodding relief is only given at 10%, which was originally meant to be relief at the lowest rate of tax (like they're about to go double it - aye right!). when you group that in with reducing the allowances may also increase the tax bands, which can impact on the restriction for the relief which will in turn affect the tax bands, which will affect the restriction...an endless cycle.
no wonder we send out tax returns to 95 year olds with reduced allowances, let the old drooling crazy pensioners calculate their own allowance...or they can do it online!!
This is what really sickens me about the whole system. I've had to deal with pensioners in a 'debt management' capacity. An 83 year old woman in tears over 300 quid tax bill which is most likely incorrect and I can't do a damn thing to help her. It outrageous that someone like that has to deal with over complicated forms until she dies and get stressed and upset about it. I do the only thing I can and authorise time to pay over a ridiculously long period at a few quid a month.
ReplyDelete