Taxpayers to part with £4.6bn in ‘unnecessary’ tax in 2013
Savers will forget to use their full ISA allowances, not make the most of pension tax relief and fail to place life protection policies under trust for the purposes of inheritance tax planning, the study, put together by Unbiased.co.uk and tax software firm TaxCalc, suggested.
According to the Tax Action Research report, on average, the UK taxpayer will pay about £153 in unnecessary tax in 2013.
Despite this, seven in 10 people (68%) state they haven’t done anything recently to tackle their individual tax waste figure.
Of the £4.6bn wasted, about 30% comes from unused ISA allowances, the report concluded.
Meanwhile, almost 4.3m people – not currently paying into a pension but who would potentially consider it – are leaving £2.6bn of income tax relief on pension contributions unused.
UK taxpayers could be wasting as much as £171m in unnecessary capital gains tax payments by not making use of the tax-efficient strategies and allowances available to them, the report said.
Karen Barrett, CEO of Unbiased, said: “The message is clear: take time to understand your tax position, make the most of tax reliefs and allowances available to you and ensure that you are being as tax efficient as possible.
“Tax is an area in which seeking professional advice can really make a huge difference to your pocket. Taxpayers looking to reduce their tax liability should look to enlist the help of a tax specialist.”