The paper sets out the OTS’s suggestions for further work to simplify taxing income on savings.
The Office of Tax Simplification (OTS) has published a paper entitled Simplifying the taxation of savings income. This considers that the UK tax system works well for most savers as 95 percent of people do not have to pay tax on income from their savings. However, it also acknowledges that many taxpayers continue to worry that they will be taxed on their savings income and that misunderstandings and confusion remain. The OTS highlights that aspects of the regime are complicated, difficult to understand, and can produce anomalous outcomes. The report identifies nine areas where further work would be beneficial, including: drawing up a personal tax roadmap to clearly set out the Government’s vision for personal taxation; a review of the various savings rates and allowances, and the interactions between them; improving guidance particularly on pension lump sums; and simplification of ISAs.
To read the paper, click here.
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