03 June 2008
The government has scrapped plans to tax 420,000 retired people
on small pensions which they received in 2007/08. But it will still
impose the tax from this year and will not tell the individuals
affected until 2009. The tax will not be collected until 2010/11 -
which will double the tax due in that year.
Pension providers were told not to bother collecting any tax on
"small pensions" - normally those around £1,000 a year or
less. This concession stretched back more than twenty years. But
many of those people should have paid tax and recently HM Revenue
& Customs decided to end the concession and collect it.
Campaigners say that the change is welcome, but add the
government should have scrapped the tax for this year as well.
