|
| |
MPs raise concerns over new tax powers in Budget |
 |
| 2014/5/8 |
Greater flexibility over pension savings announced in the Budget have been welcomed but there are concerns over new tax authority powers, MPs say.
In a wide-ranging report, the influential Treasury Committee has analysed a range of policies from the Budget that affect people's finances.
It foresaw problems with planned new powers allowing the tax authority to raid accounts for unpaid tax.
It also called for pensions and savings to be taxed in the same way.
Pensions
The most eye-catching measure in Chancellor George Osborne's Budget was a plan that effectively abolishes the requirement for some people to buy an annuity - a retirement income for life.
From next year millions of people reaching retirement age will be able to spend their pension pot in any way they want, including cashing in their pension savings in one, taxed, lump sum. Temporary rules are in place in the meantime.
The committee said that all of the witnesses it heard from welcomed the "greater flexibility and choice" that the reforms proposed.
However, it said the guidance that was being promised ahead of retirement should be clear and at least offer an opportunity of face-to-face help.
The changes are likely to lead to the creation of a variety of new financial products for retirees, and the committee said these must be sold responsibly.
"Following the financial crisis, and the mis-selling scandals, the reputation of the industry is under scrutiny," said Andrew Tyrie, who chairs the committee.
He added that it would be a "great prize" were the tax treatment of pensions and savings treated in the same way.
The chancellor announced an extension to the amount that could be saved in an tax-free Individual Savings Account (Isa) from 1 July 2014 to up to ￡15,000 either as cash or shares.
Tax powers
In the Budget, Mr Osborne outlined plans for new powers for HM Revenue and Customs (HMRC) to recover tax debts from anyone who owes more than ￡1,000 in tax or in tax credits.
This would allow the tax authority to seize the tax owed directly from debtors' bank accounts.
But the committee said the plan was of considerable concern owing to HMRC's performance in the past when it has failed to accurately calculate tax bills.
"People should pay the right amount of tax. But HMRC does not always ask for the right amount," Mr Tyrie said.
"Some taxpayers may find money taken from their accounts that later should be paid back. That would be unacceptable."
He said the committee also had "deep reservations" about changes to tax policy that would require upfront payment of any disputed tax associated with tax avoidance schemes.
"Retrospection should be considered only in wholly exceptional circumstances. The latest measure would have to be justified on those grounds," Mr Tyrie said.
"Retrospection puts policy on a slippery path to arbitrary taxation, discouraging investment and innovation and creating the scope for great unfairness."
News Source : BBC News |
|
| Contacts |
|
Company : BBC News
Country : United Kingdom
|
|
|
|
|
| |
|
|
-
-
-
AGRI WEEK TOKYO 2023
RX Japan’s J AGRI Spotlights Kyushu’s Potential as a Global Livestock Farming Hub
-
|
| |
|
|
|
|
|
|
|
