MOST PENSIONERS end up paying around 30% of their modest incomes to HM Revenue & Customs, according to a report released today, City AM reports.
Life insurance provider Prudential said the average retired household paid out around £6,400 in tax during 2011/12, from a gross income of £21,300. Some £3,800 of the tax bill takes the form of indirect taxes such as VAT and fuel duty.
The implication is Britain’s seven million retirees contribute almost £50bn to the public purse.
The two largest taxes for pensioners were income tax and VAT, each taking up 8% of income respectively.
“Retiring from work doesn’t mean that you are retiring from paying tax,” said Stan Russell, retirement income expert at Prudential.
“Whether you are liable for income tax or you are paying VAT on your purchases, the contributions you make to the Exchequer will continue throughout your retirement.”
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
Let us hope that valuable asset protection vehicles are not made prohibitively burdensome or abolished in the desire to “simplify” IHT
The government is pressing ahead with changes to the way it taxes individuals with a foreign domicile
I will feel slightly awkward when I write to the client who is about to receive a large invoice from the PAYE expert, offering him the fee protection going forward