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.”
Following recent issues with HMRC’s personal tax computation software, Brian Palmer of the AAT questions whether the government’s implementation timeframe for Making Tax Digital is realistic
The first phase of a process to restrict the amount of tax relief for residential landlords to the basic rate of tax will enter into force on April 6
Richard Le Tocq, head of Locate Guernsey, discusses the chancellor’s approach to high net worth individuals, and why relocation is increasingly attractive to HNWIs
The firm says that the U-turn 'does not alter the need for a fundamental review of the way we tax work' and that the current tax system is in need of reform