Granny tax

22/03/12
Issue of the day: Granny tax
Issue of the day: Granny tax

The government is being accused of inserting a stealth tax on the elderly in the 2012 Budget.

HM Revenue and Customs says that the government's decision to abolish age-related tax allowances for pensioners will lead to 4.4 million being £84 a year worse off.

The chancellor announced yesterday that he would freeze tax relief for the elderly, meaning that anyone turning 65 after 2013 will not qualify for tax allowances.

The decision will save £1 billion a year, it is claimed, and the chancellor has denied that pensioners will be worse off, citing the Budget's increase of the state pension.

Mr Osborne has also been criticised for his controversial decision to cut the 50p tax rate, which many argue was a tax cut for the rich in difficult economic times. 

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