Britons are set to gift the tax man a record GBP9.3 billion this year by failing
to plan their tax affairs and take full advantage of their allowances, according
to new research.
The latest TaxAction report from Unbiased.co.uk, a website that promotes independent
financial advisors, alleged that the amount wasted in tax payments will increase
by almost GBP1.4 billion compared to 2007, to reach the highest ever total since
the first report was published, 16 years ago.
This means that on average, individual taxpayers will hand over GBP290 more
this year to the tax man than they have to.
However, despite the fact that the
majority of Britons are becoming increasingly dissatisfied with the state of
the UK tax system, the survey showed that the vast majority, 82% in fact, admit
to doing nothing to mitigate their tax burden.
The largest area of tax waste, according to the report, is in unclaimed tax credits
Pension Credits, Child Tax Credits and Working Family Tax Credits, which will
amount to GBP3.7 billion this year.
Another area in which the government benefits from the failure to plan properly
is inheritance tax, and this year's report estimates that about GBP1.9 billion
in IHT will be overpaid this year.
By making full use of personal tax allowances, Britons could save themselves
a collective GBP474 million, while an additional GBP460 million could be saved
if self-assessment tax returns were completed accurately and filed on time.
Meanwhile, an extra GBP263 million will be paid to HMRC unnecessarily in 2008
by people failing to take full advantage of tax-free savings vehicles such as
ISAs and premium bonds, according to the research.
Commenting on the figures, David Elms, Chief Executive of Unbiased.co.uk observed that:
“Our TaxAction report is now in its 16th year but the message remains
the same – UK taxpayers are wasting record sums in unnecessary tax payments.
And our report shows that 2008 will be no different. We estimate that each UK
tax payer will waste an average of over GBP290 in tax payments this year."
He added: “We have seen a lot of talk about stealth taxes and IHT but
our figures prove that it hasn’t changed the way people deal with this
tax and too much money is still being wasted – and practically gifted
to the taxman. A somewhat surprising result, given the large amount of people
who are dissatisfied with the current tax system."
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