Adults facing tax issues after reaching retirement, expert claims

Mon, 27 Nov 2006

Many UK residents reliant on a pension are being overtaxed, an expert has claimed.

After reaching retirement, many Britons with annuities pensions have had excessive tax deducted from their payments, stated Low Incomes Tax Reform Group.

Additionally, HM Revenue and Customs is "refusing" to return overpaid tax from over six years ago, as the law states this is the maximum period for reclaiming tax, the body asserted.

The Low Incomes Tax Reform Group is calling for the government to extend the legal limit to eight years, to allow many reliant on a pension to reclaim their money.

Robin Williamson, technical director of the body, explains: "When a taxpayer is negligent and underpays taxes then HMRC [Revenue and Customs] can go back and collect underpaid taxes for 20 years.

"When some of the poorest pensioners in the land want a repayment of the taxes that they have overpaid, HMRC offer six years."

David Kuo, head of personal finance at The Motley Fool, recently claimed that a state pension would not be enough to secure a "comfortable retirement".


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