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Millions of Pensioners to Be Hit by HMRC as Personal Allowance Help 'Deeply Flawed'
LCP says only about 1 in 18 pensioners will qualify for the exemption, while a £1 income rise could trigger tax bills worth hundreds.
- From 2027, millions of pensioners face annual tax bills from HMRC as the state pension is expected to exceed frozen tax thresholds, with former pensions minister Steve Webb warning two Government policies will collide next year.
- The Government announced a special exemption to prevent these bills, but new analysis from Lane Clark & Peacock suggests only around one in 18 pensioners are likely to qualify for the concession.
- LCP warned this creates a sharp "cliff edge" for older people, as even £1 of extra income could disqualify a pensioner, and experts say no pensioner who retired before 2016 will benefit at all.
- Tax bills could rise from around £88 in 2027/28 to more than £220 a year by 2029/30, while Alasdair Mayes, partner and head of pensions tax at LCP, warned the proposals add complexity to the tax system.
- Webb called the policy a "temporary sticking plaster solution" that will be difficult to reverse politically, despite the promise Rachel Reeves made in the budget to provide relief.
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Telegraph & Argus+13 Reposted by 13 other sources
Millions of pensioners to be hit by HMRC as Personal Allowance help 'deeply flawed'
Pension experts warn even £1 of extra income could cost pensioners hundreds under new HMRC tax proposals.
·Bradford, United Kingdom
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Rachel Reeves Plans HMRC Rule Change to Shield 600,000 Pensioners from Income Tax
Chancellor Rachel Reeves has confirmed that the Treasury is developing changes to HMRC rules designed to ensure that pensioners whose sole source of income is the state pension will not face an income tax liability, a reform that is becoming increasingly urgent as the triple lock mechanism drives the pension ever closer to the frozen […] The post Rachel Reeves Plans HMRC Rule Change to Shield 600,000 Pensioners from Income Tax appeared first on …
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Total News Sources16
Leaning Left1Leaning Right0Center14Last UpdatedBias Distribution93% Center
Bias Distribution
- 93% of the sources are Center
93% Center
C 93%
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