That’s according to a survey of 2,000 people for Hargreaves Lansdown, which found only 48 per cent of UK adults can accurately say how much they pay out in tax, with women, those aged 35-54, and renters the least likely to know.

In addition, the less people earn, the less likely they are to know what they shell out for tax, the research found.

This is hardly surprising, said Sarah Coles, personal finance analyst, Hargreaves Lansdown: “The tax system is so needlessly complex. However, being completely in the dark about tax is dangerous because we may not budget effectively for tax bills, and we run the risk of paying more than our fair share.

“The tax system almost seems to have been designed to bamboozle.”

She cites the example of income tax.

“Even if you know the top rate of tax you pay, it isn’t the same as knowing how much tax you pay overall, because you face a different rate on each slice of your income,” Coles said.

“Basic rate taxpayers have a marginal rate of 20 per cent, for example, but pay an average of 9.5 per cent in income tax across all their income.

“So it’s worth getting to grips with the taxes we pay, and the most sensible ways to cut our tax bills.”

Coles explains how to find out what you’re paying and how to pay less…

Tax on pay – income tax and national insurance

If you’re employed, the best way to find out what you’re paying is to check your payslips. This will show how much goes in income tax and national insurance.

If you’re self-employed, your tax bill is easy to see in retrospect, because you need to do a tax return, but it can be more difficult to keep track of as you go along -especially if your income is lumpy.

It’s worth syphoning off a proportion of everything you earn and putting it in a separate account to cover the cost of the tax.

How to cut your tax bill: If you’re employed, you can lower your salary through salary sacrifice. You and your employer agree to cut your salary and pay the equivalent into benefits which have tax and national insurance breaks.

It means you save tax and NI on the portion of your salary that you sacrificed in return for these benefits.

The best-known example is the pension, but it also applies to the cost of pension advice provided by your employer, childcare vouchers (now only available to those who already receive them), workplace nurseries, cycle-to-work schemes, and ultra-low emission vehicles, which emit 75g of CO2 per km or less.

You can also make charity donations and if you’re a higher rate taxpayer you can claim back the additional tax relief through self-assessment.

If you’re self-employed, make sure you claim for everything you’re entitled to, which will bring your tax bill down, including all allowable expenses, pension contributions and charity donations.

Tax on savings

If you’re a basic rate taxpayer the first £1,000 of interest each year is tax free. If you’re a higher rate taxpayer your tax-free allowance is £500 and if you’re an additional rate tax-payer you don’t get an allowance.

Right now, it’s high earners with very high balances who risk paying this tax. But even if you’re not paying tax on your savings now, you could do so in future. If your wages rise, you could move up tax brackets and your allowance could shrink. Your savings may also build, so you end up busting the allowance.

As inflation threatens, there’s an increased chance that interest rates could rise too, which would push more people over the threshold. And when the government is looking for ways to boost the tax take, it could cut the allowance itself.

How to cut your tax bill: You can protect your savings by putting them in a cash ISA. You will tend to get a slightly lower rate than on the most competitive savings accounts, but in the easy access market the gap is closing, so you can get 0.6 per cent on your tax-free savings.

Tax on investments – dividend and capital gains tax

If you make more than £2,000 in dividends outside an ISA, or realise more than £12,300 in capital gains in a single year, you will pay tax. From April 2021, the dividend tax rate will rise too – by 1.25 percentage points.

How to cut your tax bill: The first step is to make use of your ISAs. You can shelter up to £20,000 a year in an ISA, and all income and growth is completely tax free. Assets can be passed between spouses without triggering a tax bill, so between you, you can shelter £40,000 a year

If you don’t have enough available allowance to hold your entire portfolio in ISAs, income-producing assets can be shared between a married couple, so that both take advantage of their allowances. The balance can be held by the spouse paying the lower rate of tax, to reduce the tax payable.

You can also prioritise income-producing investments within your ISAs, and growth investments outside them. This means you can take advantage of the lower rate of tax on growth, and the availability of annual capital gains tax allowances to help you manage the tax bill on gains.