Policy News Journal - 2012-13

does not always happen now, due to a mix fear and a “lack of understanding of the tax system.” “There are significant lessons here for HMRC and the Department for Work and Pensions (DWP) about the need to improve communications with pensioners.” The report provides full details of all recommendations and makes for interesting reading. One recommendation which may be of interest to those of us approaching our tax year end, is “…that every April the DWP issues a P60 type form (DWP60) stating the amount of taxable income (from the State Pension and other taxable state benefits) which a pensioner was entitled to in the previous tax year. This would give pensioners an accurate figure for their taxable state income and enable them to check they are paying the right amount of tax…” The OTS have also recommended that HMRC introduce a single composite PAYE coding notice (form P2C) which would bring together the various codes for each source of income in PAYE and would provide reconciliation along with a clear explanation and the opportunity for pensioners to spot errors much more easily than is currently the case, which in turn should provide greater reassurance. The recommendation that the HMRC/DWP communication review, should also “ …include a review of current communications about how the State Pension is taxed, clearer information about how personal allowances, and tax codes operate and which documents and figures pensioners need to be aware of… ”

To read the recommendations in full along with Analysis and provisional costing assessments from HMRC and the DWP, please visit the website of H M Treasury .

PUBLIC SECTOR PENSION REFORM PLANS REACH PARLIAMENT

19 September 2012

The Public Service Pensions Bill 2013 has been announced in parliament amid controversy over major strike action by unions.

The Bill, being formally presented to parliament as it enters its final stage, will detail the change from final salary to career average pension schemes. It also states the linking of the normal pension age of civil servants to the state pension age (excluding police and armed services). Treasury chief secretary Danny Alexander described the reforms as "a settlement for a generation". "This is a good deal for taxpayers and a good deal for public service workers," he added. The Treasury said the reforms bring long term sustainability "while ensuring that public service pensions remain amongst the very best available". This announcement comes days after the Trades Union Congress (TUC) announced coordinated strike action over the government's refusal to re-negotiate on pensions and pay reform.