UK Throwing Away Billions On Tax

The UK is gifting the chancellor a collective £7.6 billion in tax revenue that they could be squirreling away in duty-free saving products, a company specialising in independent financial advice has claimed.

Four fifths of adults are throwing away money that could be theirs to keep if they picked the right saving device, said the company. The laziness is increasing while the, no-doubt, rather chuffed chancellor is pocketing nearly £2 billion more of our money on taxed savings than he did in previous years.

"Whether through apathy or confusion, the failure to claim tax credits is just one way we're gifting unnecessary and vast sums of money to the taxman each year," said the company’s chief executive.

Top tips to help you save tax:

•    If you are eligible: Claim your tax credits – this is effectively ’free money’ in the form of Pension Credits, Child Tax Credits and Working Family Tax credits.
•    If you save: Use up your annual ISA allowance - tax could be avoided by sheltering investments in ISAs, or moving savings from an ordinary deposit or savings account to an ISA.
•    If you fill in a tax form: Sort out your self-assessment - waste could be wiped out by all forms arriving present and correct by the 31st January deadline. Self-assessment forms received after the deadline incur penalties.
•    All taxpayers: Maximise your personal tax allowances - claim tax back on banks and building society savings accounts, and transfer savings accounts to non-taxpaying spouses, if appropriate, so that the tax liability on the savings is lower, or none.
•    Plan your inheritance - plan properly to avoid IHT liabilities.
•    If you save: Top up your pension pot - make Additional Voluntary Contributions.
•    If your employer offers an employee share plan: Take advantage of it.
•    If you have capital gains: Use your allowance efficiently
•    If you give to charity: more could go to good causes by using a deed of covenant, Gift Aid or payroll giving.
•    If your child or grandchild is eligible for a Child Trust Fund: Avoid waste by using up the tax free saving potential.

If you would like to know more about tax why not ask AnswerBank Business and Finance.