TaxPersonal TaxPensioners lose nearly third of income to tax

Pensioners lose nearly third of income to tax

Pensioners contribute £50bn to Treasury coffers annually

Pensioners lose nearly third of income to tax

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.”

Related Articles

HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

1w Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

4m Emma Smith, Managing Editor
Rangers tax case to have ‘dramatic’ consequences for football and business

Legal Rangers tax case to have ‘dramatic’ consequences for football and business

4m Emma Smith, Managing Editor
Finance Bill 2017: Corporate tax reporting requirements 'a burden'

Business Regulation Finance Bill 2017: Corporate tax reporting requirements 'a burden'

10m Stephanie Wix, Writer
PAC raises “serious concerns” about HMRC’s digital plans

Corporate Tax PAC raises “serious concerns” about HMRC’s digital plans

11m Stephanie Wix, Writer
HMRC collects record £5bn in inheritance tax

HMRC HMRC collects record £5bn in inheritance tax

4m Emma Smith, Managing Editor
The top three issues that the next government must address for accountants

Making Tax Digital The top three issues that the next government must address for accountants

4m Emma Smith, Managing Editor
HMRC cuts over 150 offices to reduce running costs

Corporate Tax HMRC cuts over 150 offices to reduce running costs

9m Stephanie Wix, Writer