The Office of Tax Simplification (OTS) has published its final report on pensioner taxation. The report sets out a package of recommendations for simplifying this area of the tax system, including administrative recommendations on the introduction of a State Pension/benefits P60 for pensioners, single composite P2 coding notices and policy recommendations on the 10 per cent savings rate, married couple's and blind person's allowances and other changes.

This follows an 18 month review into pensioner taxation, where the OTS took views from pensioners, pensioner rep groups, agents and independent advisers.

Building on the work already in hand following last year's report, the key recommendations are a mix of technical and administrative points.

The final report has been put to the Chancellor for consideration.

John Whiting, tax director of the Office of Tax Simplification, said:

"Pensioners have told us many times how the tax system gets more complex as they get older. We have to work within our brief to be revenue-neutral, but we think our recommendations could make a real difference in stripping away complexities and giving pensioners information that will help understanding and make it easier for them to deal with their obligations.

"One great source of complexity is the way the state pension is taxed. Bringing this into the PAYE system would cause lots of problems and exempting it from tax, whilst attractive to recipients, would be unfair on other taxpayers and costly for the government. So we've focused on coming up with sensible solutions that could provide real help in making it easier for millions of pensioners to deal with their tax responsibilities."

The OTS also published a final report on its separate review of unproved share schemes in January 2013.