Pensioners ‘overpaying £250 million in tax’

Some 1.5 million pensioners have overpaid tax to the tune of £250 million, new figures from the National Audit Office (NAO) suggest.

According to the NAO, the overpayment equates to an average of £171 each. Meanwhile, approximately 500,000 pensioners have underpaid tax by an average of £207.

The errors are thought to have stemmed from discrepancies between HM Revenue and Customs’ (HMRC) records and the tax deducted by employers and pension providers.

Older people may also be paying more tax because they do not claim additional age-related tax allowances, the NAO’s report said.

The organisation is now calling on the tax authority to improve its service to help minimise the problem.

‘By providing a more coherent service, HMRC could make substantial savings as the number of enquiries from older people about their tax affairs would reduce - a win-win situation for all,’ commented Amyas Morse, head of the NAO.

The Revenue has said it is ‘determined to reduce over and underpayments’.

‘During the last few months we have significantly upgraded our computer systems to improve accuracy and deliver a better service to older taxpayers,’ it added.