Pensioners across the UK are being "dragged" into paying tax due to frozen thresholds and rising state pensions, according to a finance expert.
Shimeon Lee, policy analyst at the TaxPayers' Alliance, told GB News that elderly Britons are facing a "nasty surprise" if they were not expecting to be paying taxes.
People across the UK have been hit with unexpected tax demands after being caught in a trap of frozen income tax thresholds and triple-lock pensions.
HMRC issued some 1.32 million "simple assessments" to pensioners in the 2023/24 tax year, up 74 per cent from the year before.
Shimeon Lee told GB News it could be a "really nasty surprise"
GB NEWS
These assessments are carried out by the tax office on people with "relatively straightforward tax affairs" including those with income from state and private pensions, benefits and savings.
While they save pensioners from completing self-assessment tax returns, they can deliver a shock to those who don't believe their income exceeds the personal allowance.
LATEST DEVELOPMENTS
Lee told GB News: "Those with incomes under the personal allowance, which is about £12,500, generally do not pay tax on their income.
"But because of these frozen tax thresholds, which have been frozen since 2021, more and more people are being dragged into paying tax. That includes more people being pulled into paying the higher rate of income tax.
"A lot of pensioners are also now being dragged into paying tax at all, simply because their state pension rises each year due to the triple lock.
"The threshold stays the same, but the pension goes up, meaning more and more pensioners are crossing the tax threshold."
He added: "Frozen tax thresholds affect the poorest people in the country the most, and they can be a really nasty surprise for those who did not expect to be paying tax and who are already struggling to make ends meet.
"Now, the personal allowance, if it had risen with inflation, should be around £15,500. That’s a huge difference. It means people are paying tax on an additional £3,000 of income.
"If you take the income tax rate of about 20 percent, plus National Insurance of around 8 per cent, that gives you a tax rate of roughly 28 per cent."
Older britons are concerned about the rising tax burden GETTYGB News host Martin Daubney said: "There’s the winter fuel allowance grab. A lot of pensioners are still absolutely reeling from losing £300.
"That’s over a grand’s worth of extra tax revenue taken from people who simply paid into the system their entire lives.
"It’s going to start an entire conversation once again about pensioners, politically, feeling like a punching bag, like a cash cow that can just be milked dry."
