Unaware pensioners losing benefits with incomplete forms |
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Published
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Tue, 22 Mar 2005 01:00
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The Low Incomes Tax Reform Group (LITRG) revealed that pensioners were paying too much tax and were not even receiving many of the benefits entitled to them. It blamed Inland Revenue for its insufficient tax guidance due to which pensioners were not completing their tax form P161, therefore missing out on benefits.
The P161 form is issued by Inland Revenue and is computer generated. The form should be completely filled for pensioners to avail the various benefits and allowances approved for them and to ensure that their taxes are deducted correctly.
| The form is supposed to be issued only when a notification by the Department for Work and Pensions is given to Revenue stating that the person is reaching state pension age. The personal allowance in the 2005/2006 tax year has been fixed at £7,090 for pensioners between ages 65 to 74 and £7,220 for those aged over 75. The normal personal allowance, however, will be quite less in the new tax year, of about only £4,895.
Pensioners can check whether they are receiving the right personal allowances through the tax code. For instant, a person receiving the basic personal allowance will have the letter L in their tax code whereas if the person is aged between 65 and 74, the tax code will have the letter P in it. Moreover, further details of personal allowances and tax codes can be taken from the Inland Revenue website.
The LITRG also found that the form was sometimes issued to women already receiving their pensions for five years. It, therefore, warned Revenue that it was most probable for these women to never complete the P161 form as it did not appear relevant to them. Also, the form would not be reaching people who had not worked before they received a pension.
LITRG finally said that the form would be reviewed and modified, with adequate emphasis on retirement issues and keeping the aforesaid loopholes in mind.
Meanwhile, Inland Revenue begged to differ regarding the form and its guidance and said that it had always worked in close co-ordination with pensioner representative groups to provide enhanced services to its customers. It went on further to say that it didn’t want pensioners to pay extra tax and was constantly evaluating its processes to get the pulse of its customers through proper communication.
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| Comments |
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Thu, 06 Sep 2007 11:01:20 GMT (
Mason ) |
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my wife recieved her first P161 just before her 65th birthday.surely HMRC must know a persons age so why can't they automatically apply the age 65 allowance without the need to fill in an ambiguos form ? |
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