Tax Help for Older People. Robert Peel

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1 Tax Help for Older People Robert Peel

2 Tax Help for Older People A charity (Tax Volunteers) Gives free advice to people over 60 with no more than 20,000 income By phone, , letter and face to face

3 Surgeries By appointment only Mainly on Age UK and Age Concern premises (drop-in centres, not shops)

4 Venues in London Enfield Hillingdon Harrow Brent Barnet Hendon Harlesden Finchley Camden Walthamstow Haringey Waltham Forest Redbridge Wanstead Ilford Havering Uxbridge Ealing Brentford Hounslow 1. Hammersmith & Fulham 2. Kensington & Chelsea 3. City of Westminster 4. City of London Barnes Richmond Richmond upon Wandsworth Thames Merton New Kingston Malden Kingston upon Thames Fulham Mitcham Kensington 2 Sutton Lambeth Brixton Tower Hamlets Croydon Catford Lewisham Newham Greenwich Bromley Bexley Sidcup

5 Home Visits For infirm clients or where no venue nearby

6 Tax Help for Older People Helpline based at Salway Ash in Dorset

7 Surgeries and Home Visits Over 600 volunteer advisers nationwide, mainly practising or retired tax professionals

8 What are the Issues Many and varied Just a few examples to give a flavour

9 Less Tax but More Taxing On retirement, income usually falls Might expect tax affairs to be simpler In practice, often quite the opposite

10 PAYE Works well if just one source of income and marginal rate can be predicted But many pensioners have several small occupational and personal pensions Scope for error is great

11 The State Pension State pension is taxable But tax is not taken off when pension paid So tax treatment of other pensions etc has to reflect the amount of taxable State pension received

12 The State Pension If State pension less than personal allowances, can simply be covered by those allowances which are then not available for use against other income Otherwise K code required to collect tax from other sources (or selfassessment if no other sources)

13 Personal Allowance Different amounts depending on age But extra amounts taken away if income too high (at a level above that appropriate to Tax Help clients) Do you know what the current rates are?

14 Bands Additional Rate (45%) Higher Rate (40%) Basic Rate (20%) (subject to special 0% band for savings of low earners) Personal Allowances (0%)

15 Allowances ( ) Personal allowance born after ,600 Personal allowance born before ,660 Blind Person s Allowance 2,290 Married Couple s Allowance 8,355

16 Transferable Personal Allowance Starts Married couples and civil partnerships Neither may be a higher rate taxpayer One can transfer to the other 1060 of personal allowance Transferor s allowance reduced accordingly Transferee gets tax reduction of 212

17 Bands and Rates ( ) Covered by allowances nil Next 31,785 20% On savings of very low earners 10% On dividend income 10% 31,786 to 150,000 40% On dividend income 32.5% Thereafter 45% On dividend income 37.5%

18 New 0% Rate For savings income only For first 5000 of taxable income But any non-savings income will be allocated to this band in priority Making it hard to get the benefit And complicated

19 0% Rate Band Example 1 Basic Rate 20% Savings income always goes at the top Starting Rate 0% or 20% 5000 Personal Allowance Bank Interest 5000 Pension % 0%

20 0% Rate Band Example 2 Basic Rate 20% Savings income always goes at the top Starting Rate 0% or 20% 5000 Bank Interest % 0% 20% Personal Allowance Pension %

21 0% Rate Band Example 3 Basic Rate 20% Starting Rate 0% or 20% 5000 Savings income always goes at the top Bank Interest % 20% Personal Allowance Pensions %

22 Before 6 April % rate instead of 0% Band only 2880 in

23 Capital Gains ( ) First 11,100 nil Then 18% Or on higher rate income 28% Must add gain onto income to calculate how much if any should be taxed at 28%

24 Married Couple s Allowance Applies to Civil Partners as well as married couples One partner must have been born before 6 April 1935 Not as generous as it seems Given in terms of tax at 10% Transferable between partners - but rules complicated

25 Married Couple s Allowance If married or entered into civil partnership after 5 December 2005, allowance given initially to partner with higher income If married before 5 December 2005 then can elect for above treatment, otherwise allowance given initially to husband

26 Married Couple s Allowance Can elect before start of year to transfer part (but not all must retain at least 3220) of allowance to other partner If after end of year not all allowance used, unused part can be transferred to other partner Special rules for year of marriage / partnership

27 Bereavement Many Tax Help clients are recently widowed Repayment normally due as deceased entitled to full year s personal allowance but will have received only proportion to date of death Many widows have never dealt with tax before

28 And Many Other Problems The variety of problems is huge Tax Help will tackle them all Often client just needs reassurance that everything is in order Whatever the situation, we aim to remove worry

29 Ring the Helpline First Helpline should always be first point of contact Around calls a year Around 4300 require face to face meeting

30 Only People on Low Incomes If income too high, pensioner must seek paid advice from tax professional Tax Help can t help with paid-for advice

31 Customer Satisfaction Most clients delighted with the service they get Very satisfying for volunteers too because clients always so appreciative

32 TOP Talks TOP always ready to give talks to groups of older people pensioner associations etc 1 to 1½ hours about right Always generates lively debate

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