Yahoo News Labour government tax warning as people aged 55-plus to pay 'bill they don't owe'
Financial experts have warned that the newly elected Labour Party government could force UK households to pay tax they 'don't even owe'.
The new Labour Party Prime Minister, Sir Keir Starmer, and Chancellor Rachel Reeves, who took office last week, are already facing criticism, BirminghamLive reports. Tom Selby, director of public policy at AJ Bell, revealed that savers had to reclaim nearly £200million in overpaid tax in the last tax year alone, after being hit with an unnecessary tax bill.
He cautioned: "Depressingly, the true over-taxation number will likely be substantially higher." Mr Selby has urged Starmer and Reeves to take action to prevent more people from falling victim to HMRC's "faulty systems".
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"The new government needs to urgently review this approach and deliver a solution that taxes withdrawals correctly," he stated. "It is simply unacceptable that the government has failed to adapt the tax system to cope with the fact Brits can access their pensions flexibly from 55.
"Instead, it is persisting with an arcane approach that hits people with an unfair tax bill, often running into thousands of pounds."
He was speaking after Ms Reeves delivered her first speech as Chancellor after becoming the UK's first female Chancellor in history on Friday. In response, a Tory spokesperson said: "Rachel Reeves herself said you don't need to win an election to find out the state of the public finances, admitting that with the OBR, there is already detailed public scrutiny of the country's finances.
"We warned that Labour would attempt this ruse as a cause to raid pensions and raise taxes. It is now clear that is coming to pass, and the British people will pay the price."
Tom Clark from Prospect said: "Before election Reeves said in a world where OBR produced tax and borrowing numbers she couldn't "open the books" and pretend to find they were worse than feared. But OBR's work on spending is circumscribed.
"HMT officials will now review this and duly find outlook "worse than feared"."
