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UK taxpayers waste £10bn in a year
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Even though our finances are being squeezed like never before, four in five of us do nothing to cut how much we pay in unnecessary tax. Find out how to stop giving your money away
UK taxpayers will pay an eye-watering £10bn in unnecessary tax this year, according to a report from professional advice website unbiased.co.uk. This marks an increase of £700m from 2008, and the highest level of wastage in the report’s 17-year history.
And while the credit crunch is forcing us all to tighten our belts in other ways, it seems that a surprising number of us – 81% – are doing nothing to reduce the amount we give away to the Treasury each year.
Capital losses
Unbiased.co.uk estimates that UK taxpayers will waste an average of £191 in tax payments during 2009, with Londoners being the most reckless. The capital’s taxpayers are expected to blow a total of £1.4bn this year.
Meanwhile, the canny residents of Northern Ireland are the most efficient taxpayers, although the wastage total of £290m could still be reduced through more effective financial management.
How are we all losing our money? David Elms, chief executive of unbiased.co.uk, says, “It is alarming how little people are doing to take advantage of the tax incentives, reliefs and credits available to them, and to avoid being hit by fines for basic mistakes.”
Research has also found that although we resent inheritance tax (IHT) more than any other duty, unnecessary payments are set to rise by more than £300m to £2.2bn this year.
While the slump in the market has plunged the average house price below the IHT threshold of £312,000, the stinging rate of 40% charged above this level means careful planning in this area could still generate big savings.
So maybe it’s time to stop pouring your money down the tax drain and start making the system work for you.
by Tom Murphy, 12 March 2009
