Government agrees to review “spaghetti bowl” of pensions tax-relief

The Government has Agreed to Review Pensions Tax-Relief

The Government has Agreed to Review Pensions Tax-Relief

The exchequer secretary to the treasury, David Gauke, has agreed to the terms of reference for a review of the pensions taxation system by the Office of Tax Simplification (OTS), describing it as “a spaghetti bowl of reliefs”.

The tax simplification team will review the present system to gather evidence from pensioner groups and related interested parties in an effort to identify and examine parts of pensions tax system that cause retirees the most difficulties.

The team will subsequently look at how experiences among the pensioner’s population vary and propose measures to improve them. An interim report may be submitted before the next year’s budget is presented, while the final report should be ready by the second half of 2012.

The chairman of OTS Michael Jack wrote to Gauke urging him to reform several reliefs that would deal with difficulties faced by retirees and the complexities of share schemes.

“The tax system we inherited was a spaghetti bowl of reliefs and exemptions that pensioners and small businesses find particularly hard to navigate”, said Guake.

“We want the OTS to look at how we can make life simpler for taxpayers who just want to comply with the rules and pay their taxes”, he added.

The tax director for OTS, John Whiting, welcomed the secretary’s assent saying he was very happy with the endorsement of what will be a challenging and wide-range of complex projects for the tax simplification agency in its second year.

“There is potential here to help a wide range of people and businesses to deal more easily with tax, save a lot of administrative effort and cut down some of the technical complexities that abound”, said Whiting.

“We hope many people and businesses will want to contribute their experiences and ideas to our work”, he added.

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