Tax Help for Older People. Robert Peel

Tax Help for Older People Robert Peel

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, email, letter and face to face

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

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 1 3 4 Fulham Mitcham Kensington 2 Sutton Lambeth Brixton Tower Hamlets Croydon Catford Lewisham Newham Greenwich Bromley Bexley Sidcup

Home Visits For infirm clients or where no venue nearby

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

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

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

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

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

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

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)

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?

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

Allowances (2015-16) Personal allowance born after 5.4.38 10,600 Personal allowance born before 6.4.38 10,660 Blind Person s Allowance 2,290 Married Couple s Allowance 8,355

Transferable Personal Allowance Starts 2015-16 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

Bands and Rates (2015-16) 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%

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

0% Rate Band Example 1 Basic Rate 20% Savings income always goes at the top Starting Rate 0% or 20% 5000 Personal Allowance 10600 Bank Interest 5000 Pension 8600 0% 0%

0% Rate Band Example 2 Basic Rate 20% Savings income always goes at the top Starting Rate 0% or 20% 5000 Bank Interest 4000 20% 0% 20% Personal Allowance 10600 Pension 12600 0%

0% Rate Band Example 3 Basic Rate 20% Starting Rate 0% or 20% 5000 Savings income always goes at the top Bank Interest 3000 20% 20% Personal Allowance 10600 Pensions 16000 0%

Before 6 April 2015 10% rate instead of 0% Band only 2880 in 2014-15

Capital Gains (2015-16) 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%

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

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

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

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

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

Ring the Helpline First Helpline should always be first point of contact Around 22000 calls a year Around 4300 require face to face meeting

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

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

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