Almost three million pensioners and low-paid workers have paid too much tax on their savings according to new research.
6:15AM BST 07 Jun 2012
HM Revenue & Customs has admitted that as many as 3.5 million people should have been liable to pay just 10pc tax on their savings, during 2009/10 – rather than the 20pc tax that is automatically deducted. But a freedom of information request revealed that only 718,000 had applied to have this tax repaid.
Save our Savers – the campaign group that is lobbying for a change to the way bank and building society accounts are taxed – said these figures showed that many people are paying far more tax than they should on their
savings. A spokesman said: "It is often pensioners, who have low incomes, but reasonable savings pots that are losing out. A recent Parliamentary report suggested that as many as 2.4 million pensioners have overpaid tax on their savings."
Simon Rose, a spokesman for the group said: "The way in which savings are taxed needs to change. They system is inequitable and unfair. The way in which lower rates – designed to help those on lower incomes – operate is poorly understood, bureaucratic and ineffective. Better-off savers are given generous credit terms to pay the tax they owe on their savings, whilst pensioners and others on low incomes have to overpay immediately, then have to fill out various forms to reclaim their own money."