PENSIONS – more trouble for pensioners

The year was but five days old when Revenue released a press briefing indicating that they had “new” information from the Department of Social and Family Affairs indicating that a significant number of pensioners had under declared details of their social welfare pensions to Revenue.

As such pensions are not taxed at source the only way of collecting the tax arising is for Revenue to offset the taxable pensions against the pensioners tax credits which means that they pay more tax on their  private pension or other income.

There is nothing new in this practice and while the Revenues approach to this matter has come in for criticism it is quite surprising that almost 2,500 pensioners with private pensions taxable at the marginal 41% tax rate have apparently never returned details of their taxable social welfare pensions.  It is also quite surprising that it has taken so long for one State Department to pass information of this nature to the Revenue.

The key message from this is that anyone who thinks they may not have paid sufficient tax on their social welfare pensions should  seek professional advice as soon as possible as it is quite likely that Revenue will in the near future take an interest in seeking to recover any material amounts of under paid tax arising in past years.

Yet again, HMRC delays in advising taxpayers ends up costing taxpayers dearly. Added to the Budget proposals, this is not a good season for pensioners.

As multi award winning Business minded Tax Experts & Accountants in Wimbledon, London and Croydon, we look after our clients in more ways than just their financials. Talk to us today about your tax returns.