Tax allowance for over 65?

ceeforcat

zygurat789 wrote: »

Do you know that for certain?
As far as I recall the PA was announced as increasing to 7475 but no other announcement was made regarding either the 9490 or 22900.
I suspect that the age allowance is about to be phased out, after all no one in the cabinet is over 65, and hence the 22900 restriction. This will remove the need for many pensioners to submit tax returns and charge them for the priviledge and reduce the workload on HMRC.

Apart from good old Kenneth Clarke - doubt he will need the allowance though!!

System

CLAPTON wrote: »

if the age allowance was simply phased out to simplify things then then many over 65 would pay more income tax; I'm sure they would be happy to do that in exchange for a simpler system!


could you show the figures to illustrate that the admin costs of collecting tax on the state pension are equal to or greater than the admin costs of collecting the tax?

Would not necessarily result in paying more tax, the important word here is "PHASED" because that would allow time for the normal personal allowance to increase so that it was more than the current over 65 and over 75 allowances but without the complexity of the current relatively low age related income limit.

And if you think I'm going to get into an argument with you about respective costs of admin and tax collection then you are on the wrong forum, in fact the wrong planet :rotfl::rotfl:

FOREVER21

BAA1 wrote: »

I hope you are correct because it is totally stupid to retain the complexity of the age related allowances and then expect people of a certain age to have to deal with the complex tax system when they just want to receive their hard earned pension, without the tax man adding confusion to the whole issue. It would also make everyones lives much easier if the state pension was paid tax free, this too would reduce the red tape and simplify both the state pension and the tax system, which could reduce admin costs for DWP and HMRC hence paying for itself in a short period.

State Pension tax free if only !!:j

zygurat789

FOREVER21 wrote: »

Over age allowance 9490 is staying at that rate for 2011/12 it was announced in the mini-budget earlyier this year.

Could you reference that please.
This is a genuine query as i am involved in writing budget documents.

Mikeyorks

FOREVER21 wrote: »

Over age allowance 9490 is staying at that rate for 2011/12 it was announced in the mini-budget earlyier this year.

The emergency Budget merely announced the basic allowance would increase to £7475. In the small print it also announced the £7475 would be finite ..... and not subject to indexation in 2011-12.

But the age related allowances remain potentially indexable. And that is likely to be announced shortly (as the March Budget is too late)

HMRC wrote:

Existing legislation requires the Government to increase personal allowances and rate limits by the annual percentage increase to the RPI for the year to September preceding the new tax year. The Government will make the Order to set the relevant amounts for 2011-12 after the relevant percentage is published in October 2010.

The Government has announced that for 2011-12 it will over-ride the amounts that will be set in the Order for the personal allowance for those aged under 65 and the basic rate limit. Decisions on other allowances will be made at the appropriate time. The exact amounts of the basic rate limit for 2011-12 will not be known until publication of the RPI for September.

http://www.hmrc.gov.uk/budget2010/bn01.pdf

jem16

Mikeyorks wrote: »

But the age related allowances remain potentially indexable. And that is likely to be announced shortly (as the March Budget is too late)

Seems to have been clarified now according to this post.

http://forums.moneysavingexpert.com/showpost.php?p=39034656&postcount=35

Mikeyorks

jem16 wrote: »

Seems to have been clarified now according to this post.

Yes - it appears to be on the Treasury site from yesterday.


Basically :-

• both age related allowances increased by £450 / clawback level raised from £22900 to £24000
• basic (20%) threshold reduced from £37400 to £35000
• 10% Savings rate increased from £2440 to £2560
• ISA allowance - as announced earlier - up from £10200 to £10680

http://www.hm-treasury.gov.uk/d/rates_thresholds_tables.pdf

pensioner2

Why are those over 65 only getting a £450 increase in their tax allowance,rather than £1000?
Why has so little publicity been given to this?
Will there be demonstrations on the streets of London?

noh

pensioner2 wrote: »

Why are those over 65 only getting a £450 increase in their tax allowance,rather than £1000?
Why has so little publicity been given to this?
Will there be demonstrations on the streets of London?

Why do those over 65 have a higher tax allowance than those under 65?
I can't see any logic in it.
I suspect the age related allowance will eventually disappear.

John_Pierpoint

Tax has very little logic built into it - it is just a mess of ever increasing regulations, dreamed up by civil servants and politicians protecting their vested interests.