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The Low Incomes Tax Reform Group (LITRG) of the Chartered Institute of Taxation (CIOT) has published a report entitled Older People on Low Incomes - The Case for Tax Reform, which addresses some of the recurring issues facing pensioners where the Group believes there is an urgent need for reform.

In the report, LITRG explains why it believes older people deserve special consideration from the tax system, and assesses whether the standard of service that HMRC offers matches up to what older people have a right to expect. The report also goes on to look at how particular life events can affect older people’s tax position, and considers a variety of tax issues that low-income pensioners face.

For example, despite a Cabinet Office report focusing on the poor service Government departments give to bereaved people, HMRC has withdrawn its only leaflet on bereavement available to the taxpayer, while mistakes and maladministration proliferate. LITRG recommends that HMRC bring their policies and practices on bereavement into line with Cabinet Office recommendations.

Going into residential care is sometimes financed through family arrangements which in recent years are more prone to be trapped by sweeping anti-avoidance legislation, even though no tax avoidance is intended. LITRG recommends that every new policy should be ‘care-proofed’ – ie fully examined for its possible effect on those in need of care.

LITRG also recommends that for those who represent pensioners or help them with their tax affairs HMRC should work with the DWP to develop a consistent and customerfriendly policy that works across both departments.

LITRG does not believe that any of the changes highlighted in the report would, in the medium term, add to the costs of government. It is however certain that the recommendations would significantly enhance the lives of countless pensioners.

The report is extremely well-written and thought prevoking - pensioners and anyone involved with their care and well-being will be interested in the findings and recommendations.

In conclusion, with pensioners forming an ever-increasing proportion of the population, and the incidence of poverty among pensioners being greater than elsewhere in the community, LITRG suggests that if HMRC are serious about their customer commitment, their actions must start to follow their rhetoric. LITRG urges them to take seriously the recommendations of this report.

Link

LITRG: Older People on Low Incomes - The Case for Tax Reform