Conclusions and recommendations
1. The Department's systems for dealing with
older people's tax affairs are too complex, create uncertainty
for older people, and result in too many overpaying tax.
The Department should establish a clear plan by June 2010 to guide
its approach, making it simpler for older people to fulfil their
obligations and reducing the level of error in their tax. This
should include accurate information on the needs of older people;
and a clear explanation of what the Department and other agencies
should do to meet these needs.
2. The Department does not know the costs
it incurs, how effective it is in meeting the needs of older people,
or the likely impact of future growth in the numbers of older
people. The Department should track the
costs of helping older people with their tax affairs, the quality
of service it provides and their take-up of allowances. It should
estimate the likely impact of the forecast growth in older people,
and decide how it will provide effective support for older people
as the number of older people increases.
3. The age-related allowances are intended
to help people financially in later life but the Department does
not know for certain how many people are eligible for the allowances
but do not receive them. The Department
should establish accurately how many older people have not claimed
the age-related allowances, Blind Person's Allowance and the Married
Couple's Allowance but are eligible to do so, and identify the
steps it will take to ensure they receive the allowances due to
them.
4. The age-related allowance rules are complex
and hard for older people to understand and place too much emphasis
on older people having to prove their eligibility, resulting in
errors in claims and potential overpayments of tax.
The Department should reduce the effort required by older people:
a) by agreeing with the Department for Work and
Pensions and other agencies what information the Department could
use to identify who is eligible for an allowance;
b) by awarding the allowances automatically without
the need for a claim in those cases where the information available
indicates an individual's eligibility, and
c) where claims are required, by making the process
easier to complete, such as by allowing claims to be made by e-mail
or with assistance from the Department's staff.
5. Many older people with multiple income
sources have to cope with several tax coding notices which they
find hard to check and which creates costs for the Department
in dealing with associated enquiries.
Once the rollout of the new PAYE system is complete in 2010 the
Department should provide people with a single document which
explains clearly how their tax code is calculated and how tax
will be deducted from each income source.
6. The planned one-stop shop drawing together
online, telephone and face-to-face support across Government and
the third sector offers an opportunity for the Department to improve
the access older people have to information and help in managing
their tax affairs. The Department should
decide with the Department for Work and Pensions, as a matter
of urgency, what tax information will be provided for older people
through the one-stop shop and ensure that they will have access
to this information as soon as the initiative is launched.
7. The Department recognises that working
with third sector organisations is a cost-effective way of helping
older people to get their tax right, but it is not yet making
the most of such organisations in helping it to contact hard-to-reach
older people. The Department should:
a) identify the types of support which third
sector organisations are best placed to provide to older people
and how it can maximise that contribution, and
b) target its funding accordingly, providing
a commitment to long term funding where this would help third
sector providers develop a more sustainable and cost-effective
service.
8. In pursuing efficiency savings, the Department
should not put at risk the access to face-to-face contact that
older people and other vulnerable groups need, which is currently
provided through its enquiry centres.
The Department should talk to other organisations to identify
how the needs and preferences of older people can be met most
cost-effectively. It should recognise that older people often
place great value on face-to-face contact and safeguard the opportunities
for this when deciding on what access people have to enquiry centres
in different parts of the country.
| 
