Paddy Millard, one of the founders of charity Tax Help for the Elderly, said there are a number of reasons the older generation might struggle.
“As you get older you get less confident and competent, particularly with tax,” he said. “Many older women outlive their husbands and are less likely to have ever handled tax.
“I’ve only had one man come to us for advice and say my wife handled all the paperwork: mostly it’s women saying ‘my husband did it all’.”
Mr Millard said HMRC could do more to make the process simpler for those who have “predictable untaxed income”. For example, a foreign pension cannot be taxed at source as it originates in another country and a pensioner receiving one is expected to fill in a return. However, their income remains predictable and Mr Millard said this should be made easier.
The spokesman for the tax office said: “The vast majority of pensioners do not need to fill in tax returns, and we are taking thousands of them out of self assessment every year. “We offer a wide range of support for those who need to complete a tax return through our website, helplines and home visits.”
Confusion among pensioners about ‘simple assessment’
In addition to pensioners with extra income, around 27,000 of those receiving the state pension only are currently required to fill in a tax return – despite HMRC already holding their data.
Caroline Miskin, a tax expert at the ICAEW, said those with a state pension above the tax-free personal allowance, currently £11,500, were currently required to fill in a return as the Department for Work and Pensions has no way to tax their income at source.
HMRC has plans to lift these pensioners out of the self-assessment system, but the chaotic introduction of the new “simple assessment” process has left many scratching their heads. HMRC began publicising its simpler system in March, telling thousands of pensioners they would no longer fill in a return. But the tax office still sent them letters requesting a return in April.
A spokesman for HMRC said it could be “four or five months” before it announces the introduction of simple assessment and anyone who has received a letter requesting a tax return should fill one in as normal.
Simple assessment should mean in cases where information is already held by HMRC, it will send taxpayers an estimate of their income. The taxpayer will only have to contact the taxman if there is a mistake.
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