New research suggests that UK taxpayers are set to waste almost £5 billion this year by paying more tax than necessary.
The 2014 TaxAction research, released on 17 February by www.unbiased.co.uk, a website enabling consumers to find professional advisers, reveals that taxpayers are set to pay £100 million more in tax than they did in 2013 by not making the most of tax reliefs available to them or not using tax-efficient savings products.
The £4.7 billion set to be wasted in 2014 translates to £161 per individual taxpayer, up from £153 in 2013.
The four key areas of tax waste looked at in the research were Individual Saving Accounts (ISAs), tax relief on pension contributions, capital gains tax and inheritance tax.
Pension contribution tax relief was the area of most waste at £2.9 billion, up from £2.6 billion last year. The 2014 “tax waste” figure for ISAs was £1.1 billion, followed by £530 million for inheritance tax and £154 million for capital gains tax.
While just over a third of those questioned (38 per cent) felt they would be confident in sorting out tax affairs without a professional adviser, three out of four (77 per cent) of respondents admitted they had done nothing in the past 12 months to cut their individual tax waste figure, up from 68 per cent last year.
Karen Barrett, chief executive of unbiased.co.uk, comments: “We are still seeing millions of UK taxpayers putting their hard earned cash into taxed saving and investment vehicles, when reliefs, allowances and better rates are available to them!
“Tax is an area where seeking professional advice can really add value, and not just to your pocket – a professional adviser can advise on responsible tax planning not just now, but for the long term. Those looking for advice should speak to a professional financial adviser who specialises in tax or an accountant to ensure they are being as tax-efficient as possible.”
At Milsted Langdon, we understand that no one wants to pay more tax than they have to. However, with careful planning it is possible to legitimately minimise your tax liability, ensuring that more of your hard-earned money goes back into your business or towards achieving your life goals, rather than the taxman’s pocket. This is where our tax team can help. Alternatively, our sister company Milsted Langdon Financial Services can help ensure your savings and investments remain as tax-efficient as possible throughout your lifetime.