10% Savings Tax Facing Axe
HMRC has recently stated that just a fifth of low income savers such ashave failed to claim a tax rebate on their savings. The staggering 3.5m savers who are entitled to the 10% tax rate and relative rebate, could receive as much as £1200 should they claim for the past four year period. But time is of the essence.
However, for the sake of saving many savers financial confusion, the Treasury’s Office ofSimplification are now campaigning to have the 10% rate removed. But regardless of their good intentions, the move could thousands of economically challenged savers needlessly losing their hard-earned money to HMRC.
The Office ofcommented on a proposed limit increase on tax-free ISAs: “Work would have to be done to see what an appropriate ISA limit would be … The Government may be unlikely simply to raise the ISA limit by the full amount, as this would reduce the Treasury’s tax take on savings; particularly as so few people claim the 10p rate.”
But not all expert economists are in agreement with the Government’s proposal. Jason Riddle of pro-saver website Save our Savers had this to say: “…those on low incomes aren’t getting the tax benefit to which they are entitled, but the Government should make it easier to claim this tax, not get rid of it completely; this is a real slap in the face for low-income savers…”
He went on to highlight how those on low incomes who wish to claim back their own money are also subject to an extensive form-filling system, as well as having to pay back any overpayments straight away, as opposed to those in the money who pay 40% and have until year-end to pay up. Members of the general public are also enraged by HMRC; here’s some insight into their sentiments:
“The entire lot of them (MPs) are deaf dumb and blind to the plight of pensioners who have done the right thing and saved out of taxed income because there was no pension scheme available to join. The effects of 0.5% bank rate, quantitative easing, the Funding for Lending Scheme, removal of Age Allowance and now removing 10% tax on savings income proves they hate us with a passion! MPs are demanding a 32% increase in their salaries yet we are told the Consumer Price Index is more suitable for us. Well, sorry if the MPs think they deserve 32%, we deserve double that. We have done the right thing and cared for our children, our sick partners and our elderly parents and we are being punished for saving; it’s simply beyond reason and it’s a disgusting way for any country to behave.“
Scathing words it’s true, but they’re certainly indicative of the public’s growing resentment towards the British Government.
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