OTS confirms pension and share scheme reviews

THE OFFICE of Tax Simplification will review the taxation of pensioners and share schemes, it confirmed today.

As revealed by Accountancy Age last week, the OTS will look at the complexities faced by pensioners, especially those with multiple sources of income. Chairman Michael Jack (pictured left) and tax director John Whiting (right) will also gather evidence on where approved share schemes are most complex. This will run in conjunction with its review on small business taxation.

In a letter detailing the new review areas to Exchequer secretary to the Treasury David Gauke, Jack wrote: “For the estimated 5.6m 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.”

He said that businesses have regularly cited share schemes as having “too many complexities and traps for the unwary”. The office will see if there is scope to “harmonise rules and make arrangements simpler to use”.

The OTS will report on these projects and the simplification of small business taxation before the 2012 Budget.