Taxpayers continue to be hit by huge fines for late self-assessment forms, says Unbiased.co.uk
The January 31st tax deadline is only days away....
Fines may total 479 million this year*
Over 1 million forms submitted late in 2007 (16% more than in 2006) so consumers must still do more to take TaxAction
Visit Unbiased.co.uk and find an IFA to help you with your financial position
Taxpayers are set to gift the taxman an unnecessary 479 million this year in fines generated by late returns, miscalculations and surcharges on unpaid tax, according to research by Unbiased.co.uk, the online Find an IFA search. The research also reveals this amount has increased by 16 million on estimations for last year.
Failure to get forms to Her Majesty’s Revenue & Customs (HMRC) by the fast-approaching January 31st deadline will incur an initial 100 late payment charge, as well as a hefty additional 60 a day fine. If the return is still overdue in July, a supplementary penalty of 100 will be added additional to the daily charges. Furthermore, a penalty of up to 3,000 may be charged for each year in which inadequate records are kept.
David Elms, Chief Executive of Unbiased.co.uk, said, “The penalties for those who return their self-assessment forms late or incorrectly remain unforgiving, so now is the time to take tax action! Missing the HMRC’s deadlines inevitably results in hefty fines, and in the current climate more than ever we would urge consumers to avoid this by ensuring that their forms arrive on time and in order. Remember that expert help is always at hand, in the shape of an IFA, to help you deal with your tax return.”
Unbiased.co.uk’s research calculates that money will be wasted in the following three ways:
102 million in fines for forms returned past the January 31st deadline
315 million through fines for mis-calculations made on tax forms
62 million in surcharges for unpaid tax from previous years.
In 2007, it was estimated that over 1 million self-assessment forms were received after the January 31st deadline. Of these, the vast majority incurred a penalty of 100, and many more were subject to further surcharges. This represents an increase of 16% on 2006, which shows that consumers are still failing to take action and reduce the amount of tax they pay.
Elms concluded, “You may already consult an accountant for tax advice, but to ensure you’re managing your personal finances as tax efficiently as possible, an independent financial adviser may offer some invaluable help.”
To help people take control of their finances Unbiased.co.uk offers an online guide to reducing tax waste as well as tips to reducing tax waste and an online tax wastage calculator. For online information and details of local IFAs, visit Unbiased.co.uk
-ends-
Tax doesn’t have to be taxing – Here are 10 basic ways** to claw back some of the waste:
- IF YOU HAVE ASSETS OVER 312,000: Plan your inheritance - an extra 1.9 billion could go to chosen heirs by planning properly to avoid IHT liabilities. IHT is often lost through not writing life assurance policies in trust, not thinking about inheritance tax allowances and, worst of all, by not making a will at all.
- IF YOU SAVE: Use up your annual ISA allowance - 263 million in tax could be avoided by sheltering investments in ISAs, or moving savings from an ordinary deposit or savings account to an ISA. Also consider a Friendly Society savings account or products from National Savings & Investments as tax-efficient savings options.
- IF YOU ARE ELIGIBLE: Claim your tax credits - 3.7 billion of ‘free money’ is up for grabs from HMRC and the DWP, in the form of Pension Credits, Child Tax Credits and Working Family Tax credits.
- IF YOU FILL IN A TAX RETURN: Sort out your self-assessment - 479 million 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 of 100; further penalties and errors make up the balance of tax wasted in this way.
- ALL TAXPAYERS: Maximise your personal tax allowances - 474 million goes begging each year, 330 million through non-taxpayers failing to claim tax back on banks and building society savings accounts, and a further 144 million by taxpayers not transferring savings accounts to non-taxpaying spouses, if appropriate, so that the tax liability on the savings is lower, or none.
- IF YOU SAVE: Top up your pension pot - 726 million could be spared by optimising contributions to personal or company pension schemes, or making Additional Voluntary Contributions.
- IF YOUR EMPLOYER OFFERS AN EMPLOYEE SHARE PLAN: Take advantage of it - 184 million is up for grabs for the estimated 600,000 staff currently in Profit Related Pay schemes.
- IF YOU HAVE CAPITAL GAINS: Use your allowance efficiently, perhaps by transferring assets between spouses to make the most of both of your CGT allowances - 264 million could be saved in this way.
- IF YOU GIVE TO CHARITY: 936 million more could go to good causes by using tax-efficient means of charitable giving, i.e. 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 - 242 million in tax could be saved in their first yearof existence.
* TaxAction 2008 report produced for IFA Promotion by RAKM, based on a specially commissioned analysis of Inland Revenue and a range of other official data sources.
** IFAP Taxation Survey 2008, UK Nationally representative sample of 3,048 adults conducted online by Opinium Research LLP between 7th and 14th Feb 2008
For further information please contact:
David Elms | Anna Schirmer/Jennifer Comerford/ Anna Moulds |
Chief Executive | Lansons Communications |
Unbiased.co.uk | 020 7294 3682 |
020 7833 3131 |
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For expert comment or case studies from over 200 media-friendly IFAs, journalists should visit www.unbiased.co.uk/bluebook to search online or call Unbiased.co.uk’s Media Services hotline on 020 7294 3682.
PLEASE NOTE: We have now discontinued the consumer hotline and so consumers seeking an IFA should visit www.unbiased.co.uk
1. Unbiased.co.uk
Unbiased.co.uk is a not for profit organisation which promotes the benefits of Independent Financial Advice to UK consumers.
Unbiased.co.uk, which is in its 19th year, helps create over 7,500 pieces of positive coverage in the consumer media each year, highlighting the importance of seeking independent financial advice across online, broadcast and print media. This positive media generation influences consumers’ behaviour and increases their awareness of the benefits of seeing an IFA.
Unbiased.co.uk is now the online gateway between consumers researching their financial advice options online and IFAs. Over 60 white label versions of Unbiased.co.uk’s confidential ‘Find an IFA’ service are now running on partner websites including those of media and portal money channels, product provider sponsors and other industry bodies.
Over the past 12 months, over 525,000 consumers have used Unbiased.co.uk’s ‘Find an IFA search’, or one of the white labels, to find a local IFA – and 94% of these enquiries were dealt with online.
When searching for a ‘Find an IFA’ on UK Google, around 80% of the returned links over the first five pages of search results now display either Unbiased.co.uk directly or a white label version of Unbiased.co.uk’s ‘Find an IFA’ service running on a partner website. To support this activity Unbiased.co.uk now regularly provides white label versions of its consumer guides, tools, microsites and podcasts to partner personal finance websites.
2. Unbiased.co.uk’s product provider sponsors
AEGON Scottish Equitable Plc | Lincoln |
Alliance Trust | Lockton |
AXA Life | Lutine Assurance Services |
Bright Grey | MetLife |
BPP | National Savings & Investments |
Canada Life Ltd | New Star Investment Funds |
Cardif Pinnacle | Norwich Union Life |
The Children’s Mutual | Prudential |
Clerical Medical Investment | Scottish Life |
Defaqto | Scottish Life International |
Friends Provident | Scottish Widows Plc |
The Hartford | Standard Life Assurance Company |
Invesco Perpetual | Unum |
Legal & General | Zurich Intermediary Group |
Registered Office: Unbiased.co.uk is the consumer brand of IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606