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Published on 14 January 2004

Tax help for older people

Pilot projects in the South West and West Midlands, April 2001 to March 2002

Executive Summary

What is TOP?

TaxHelp for Older People, or 'TOP', is a programme which harnesses the skills of tax advisers to provide unpaid help to poorer, older people who cannot afford professional fees. The programme was established to run for one year starting in April 2001 in two locations - in Wolverhampton, West Midlands and in rural areas of the South West of England - and since then has continued to flourish. This report reviews the work of TOP up to the end of the pilot phase in March 2002.

The TOP pilots were conceived and organised by the Low Incomes Tax Reform Group (LITRG), a committee of the Chartered Institute of Taxation (CIOT) which is the leading professional body in the United Kingdom concerned solely with taxation. Funding was generously provided by the CIOT and the Nuffield Foundation.

The project was inspired by the experience of other countries such as the United States, Canada and Australia, all of which have successfully introduced state-supported volunteer programmes to help vulnerable groups to cope with the complexities of modern taxation. The purpose of the pilots was to assess the viability of a similar programme in the UK, and Wolverhampton and the South West were chosen as representing very different areas but having in common a substantial population of older people on low incomes.

The need for TOP

One overriding factor indicated to LITRG that there was a need for free, local, professional tax advice for the poorer pensioners. This was the complexity of the tax system in the way that it affected this group, a matter on which LITRG had already published the results of extensive research. The findings showed how charging different income sources at different rates, the structure of the personal tax allowances, and the administrative complexities of self-assessment and PAYE, all combined to confuse and worry vulnerable older people. The fact that those on low incomes were in the tax system at all was a modern phenomenon, due to the failure of personal tax allowances and thresholds to keep pace with inflation during the 1970s and early 1980s, so that liability to income tax now started at a very low level.

The Inland Revenue provide what help they can, including home visits, but many pensioners are nervous of approaching the Revenue, and in any case are largely ignorant of the services offered. Many TOP clients were dealing with their own tax for the first time following a life event such as retirement or bereavement, and were often at a loss where to go for advice. The Revenue themselves, in local tax offices and latterly at Head Office level, have supported the TOP project because of what they see as its ability to build bridges between them and their pensioner customers, and to offer a choice of service. Initial scepticism at Head Office has given way, over time, to enthusiastic endorsement, and this has contributed in no small way to the success of the pilots.

Members of LITRG also discussed their ideas with other voluntary and governmental bodies such as the CABx, Age Concern and local Councils. They too had detected the need for such a service, one which by themselves they were able to fulfill only to a limited extent. However, they saw the potential for extending their own services to older people in partnership with local tax professionals, and offered the use of their premises and other support. Using contacts developed through links with the Better Government for Older People programme, the scheme soon established a model for partnership between the Government, voluntary sector and professions.

Planning and preparation

The main imperatives in setting up the pilots were to choose location and premises, to provide administrative facilities, to recruit the volunteers, and to attract the clients.

It was necessary to focus the limited resources available on just two areas which were within easy reach of the LITRG members who would act as co-ordinators. The co-ordinator of the South West pilot would take on the administrative tasks in addition, often carrying his own portable office equipment around the area, while supporters in the voluntary and public sectors would offer the use of their premises (and equipment if available). In Wolverhampton, the charity Age Concern would not only provide the premises and equipment, but would also take on the day-to-day running of the pilot.

The volunteers were recruited from the professional institutes - the CIOT in the South West, and in Wolverhampton from the local Society of Chartered Accountants with the help of the member firms. To bring in the clients, leaflets and posters were distributed and the local press and radio were notified. Both the CIOT and the Inland Revenue issued press releases to mark the start of the pilots in April 2001.

Finally, a modicum of supporting documentation was drawn up - the object of this was to clarify the aims and objectives of the programme, without overwhelming its volunteers and supporters with burdensome paperwork. The charity TaxAid, which had for some years been the only body in the UK providing free specialist tax advice to people in financial need, allowed TOP free access to its own documentation. The final pack included terms of engagement for the volunteers, notes for clients outlining matters such as the complaints procedure and equal opportunities policy, and notes for volunteer advisers incorporating model records of client interviews, ethical standards, and so forth.

Since many of the technical issues in advising older people on low incomes do not routinely come up in day-to-day practice, the volunteers were given training sessions at half-day seminars, at which Inland Revenue leaflets and LITRG-generated training materials were distributed.

The pilots in operation

Overseen by a Steering Committee which met monthly, the TOP pilots in Wolverhampton and the South West soon evolved into two different models, influenced mainly by the different geopolitical and demographic features of the two locations.

In inner-city Wolverhampton, while local Age Concern employees took on the administration, the LITRG co-ordinator and other members of the Steering Committee dealt with publicity, monitored the technical content of the advice sessions and co-ordinated the efforts of the various people and organisations involved in the pilot. Advice sessions were held in the premises of Age Concern at the same time every week, and the volunteers would typically see between two and four clients in each session. Age Concern's premises turned out to be ideal as they were centrally located, well served by buses from the surrounding towns, well adapted to the needs of disabled people and the multi-ethnic community, and offered a cosy restaurant looking on to the street.

In the South West, a diffuse rural area, the LITRG co-ordinator cum administrator took telephone bookings, liaising with local charities and District Councils to arrange advice sessions wherever needed. The area served has grown steadily; starting as 'the Dorset pilot', it soon spread out to South Somerset and East Devon, incorporating Purbeck in October 2001. Because of the distances between major settlements and the scarcity of public transport, a telephone advice service was developed to supplement the face-to-face sessions.

Short articles in local newspapers were the main outlet for publicity during the pilots. In the early months, demand for the services of TOP flourished, but became spasmodic in Wolverhampton during the summer - although in the South West it peaked in July and August. The clientele steadily increased during the autumn and winter as the service became better known through more effective publicity and by word of mouth.

From the client advice records kept by the volunteers, the pilot organisers were able to extract data about the type of tax problems experienced by older people on low incomes, and defects in Revenue administrative processes. This has largely vindicated the results of LITRG's research detailed in its first, influential report on the tax system as it affects poorer pensioners . And in being fed back to Revenue in anonymised form, it has also assisted in the formation of policy.

Locally, the partnership with the Revenue has worked well. If a client presents a query which can be resolved by contacting the Revenue, volunteers have had the facility of a hotline to the Wolverhampton or Dorchester tax office, manned during the advice session. Client confidentiality is protected by a PIN known only to the volunteer, the TOP administrator and the Revenue officer at the other end of the line. In virtually all cases, the tax office staff dealt with the query on the spot, or rang back before the end of the interview.

Client satisfaction with the service has been monitored, and levels are high, with 93 per cent rating the service as 'excellent' and the rest as 'good' (the remaining alternatives being 'fair' and 'poor'). The volunteers, too, have enjoyed their experience of the voluntary sector and, in the words of the Director of Age Concern Wolverhampton, are 'a credit to their profession'.

What the pilots show

The main purpose of the pilots was to provide lessons which might prove useful in the event of a similar service being offered on a nationwide scale. In other countries with tax volunteering programmes, the state supports the initiative by contributing both expertise and funds - although the individual schemes are often run on a remarkably low budget. Likewise in the UK the funds needed for the pilots were not large, and it is disappointing that the Government were not willing to help financially, although ministers had warm words for the project and it latterly had the firm backing of the Inland Revenue. Nevertheless, since the main body of this report was written, a third funding application has been turned down by the Active Community Unit of the Home Office.

It is hard to see how TOP could be extended nationwide without such financial support. And yet, both volunteers and clients speak of the need for a service like it to be available to all. The pilots have shown just how much anxiety older people on low incomes experience about their tax affairs - anxiety which TOP is best placed to relieve, being a local service (although the service offered by TaxAid is available to pensioners within reach of Central London, and those who can comfortably use the telephone).

The fact that TOP has continued to flourish after its pilot phase shows that it has been successful in fulfilling a need. Analysis of the data drawn from the advice sessions points to areas where more work is required: chiefly publicity, continuing training, targeting ethnic minorities, and quality control. But apart from offering a much-needed service to a vulnerable group of people, TOP has become an acknowledged model for an initiative which aims to help the community through partnership between government and voluntary sector. This may in time turn out to be TOP's most enduring legacy.

LITRG is now pressing government to establish a partnership with the tax profession and the wider voluntary sector so that TOP is not allowed to die, but can start the expansion into a nationwide scheme by April 2003.

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