Rishi Sunak freezes tax thresholds for six years Photo: JUSTIN TALLIS/AFP
Rishi Sunak's hidden tax raid will affect up to 900,000 pensioners new next year's income tax bill will be a surprise, analysis suggests.
The Prime Minister's six-year freeze on tax thresholds will force hundreds of thousands of pensioners claiming couple's tax relief to pay the levy to their state. pensions for the first time.
Marriage Allowance allows one half of a couple to pass on a tenth, or £1,260, of their personal tax-free allowance to the other, saving them up to £252 a year as long as the other half is basic rate taxpayer.
According to HMRC data obtained through a freedom of information request, around 40%, or 900,000, of the 2.28 million people currently claiming benefits are pensioners.
The tax-free income threshold is frozen. is £12,570 from 2021, meaning the benefits on offer have not kept pace with the significant increase in the State Pension.
The new flat state pension will increase by 8.5% to £11,502 a year from April. This means for the first time it will cost more than 90 per cent of the personal allowance, or £11,313, leaving couples with an initial tax bill of £39.
That number is expected to rise into the hundreds. pounds by the end of the decade if thresholds remain frozen under current rules, wiping out the benefits of tax breaks introduced just a decade ago.
Two former pensions ministers have called on Chancellor Jeremy Hunt to do more to protect growing numbers of pensioners from tax bills.
Sir Steve Webb, Pensions Secretary between 2010 and 2015, said: «The state pension, combined with a freeze on tax relief, is driving large numbers of pensioners into the tax net.»
Sir Steve, now a partner at LCP consultants, added: “Additional complexity arises for the 900,000 pensioners using the Marriage Benefit, many of whom need to decide whether to stop sharing their tax benefits now that they become taxpayers themselves.
While he noted that some of these people would receive a less generous basic state pension, he added: «HMRC estimates that more than 8 million pensioners will pay tax this year and more next year, and that's the majority of all pensioners.»
Marriage benefit was introduced by former Prime Minister David Cameron in 2015, when the state pension lagged far behind personal income tax benefits.
However, several years of significant cash increases, helped by the state pension triple lock, which ensures annual payments rise by the maximum wage, price or 2.5%, have narrowed the gap.
HMRC is already under pressure after around 1 million people missed the January 31 self-assessment deadline, with many complaining about 40-minute wait times. Thousands of people have been forced to file a tax return for the first time due to financial pressures that are forcing people to hand over most of their pay rises to tax collectors as wages rise and tax bands remain frozen.
Baroness Ros Altmann, who succeeded Sir Steve as pensions secretary in 2015, warned that many over-65s would face unexpected demands from HMRC next year.
“The problem is that many will not know what they need they may need to pay tax and they won't find out about it quickly. But in the end they will simply be billed.
“I would like HMRC and the Department for Work and Pensions to connect the dots with each other. And if you have a small tax bill to pay, it's paid automatically, without the need for any action.
“This is not money that is just lying around for many retirees, especially those who rely on it. only the state pension and nothing else. Something isn't working. We need to raise the tax threshold to try to ensure that people who are not living on generous and huge pensions do not face difficulties paying tax.»
Sir Steve added: «Pensioners on modest incomes should be When retiring, they are spared the hassle of dealing with the tax office. The Government needs to think carefully about raising the tax starting point to ensure that pensioners with limited funds are no longer faced with annual tax bills.»
A Treasury spokesman said: «Pensioners whose only income is new state income.» pensioners and those who have not deferred or received protected benefits pay no income tax, and this year we delivered the biggest increase in pension benefits ever, up 10.1%.»
Fiscal resistance is already hitting workers. . The Office for Budget Responsibility (OBR) predicted last November that an extra three million workers would face a 40p income tax rate over the next five years as the thresholds remain frozen.
This also means 4 million more workers will be forced to pay 40p income tax.
Relatively low incomes will be taken into account by the tax system for the first time.
A Treasury spokesman said: “Our tax burden remains lower than any major European economy – and by increasing individual thresholds since 2010.” We will exclude 3 million people from paying taxes altogether.”
Свежие комментарии