HMRC issues reminders about RAC tax changes

From 6 April 2007 RACs will be taxed through Pay As You Earn (PAYE), which HMRC says will make sure exactly the right amount of tax is deducted, providing it has up-to-date information from the pensioners. Beginning this month HMRC will start sending out letter, leaflets and forms to pensioners who receive annuity income to explain how the change will affect them, as currently unless pensioners tell HMRC they are not liable to pay tax, companies paying the RACs have automatically deducted income tax of 22%. This means some pensioners may have been paying too much tax and have had to cla...