Celebrate Tax Freedom Day on 31st May

Confidentially search for details of an independent financial tax advisor close to where you live or work from around 9,000 IFA locations UK-wide.

 Friday 27^th May 2005

- Call 0800 085 3250 or visit www.taketaxaction.co.uk for a free tax guide -

Tuesday 31^st May is the date for UK taxpayers to open the bubbly and celebrate Tax Freedom Day, the theoretical point in the year at which we stop working for the government and start working for ourselves*. However, IFA Promotion, the organisation promoting the benefits of independent financial advice, is urging people to take tax action now by addressing their financial situation and reducing some of the £5.7 billion we will waste in tax this year.

David Elms, Chief Executive of IFA Promotion commented “Tax Freedom Day highlights to us the vast amounts of money being channelled into the pockets of the taxman.  No one likes paying tax, yet nine in ten of us are paying more than we should and three quarters admit to doing nothing about it.  We are urging people to take tax action now to bring forward their personal Tax Freedom Day and celebrate early.”

IFA Promotion’s annual TaxAction** campaign, now in its thirteenth year, reveals that nine out of ten adults in the UK will waste a staggering £5.7 billion this year in unnecessary tax – enough to create a new millionaire every day for the next fifteen years!  Research shows that six out of ten of us resent our rising tax bills but the majority still do nothing to reduce them.

With each person throwing away an average £133 in unnecessary tax a year, just taking a few simple steps could stamp out much of this tax wastage for good:

·         IF YOU SAVE: Use up your annual ISA allowance - £127 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 additional tax-efficient savings options.

·         IF YOU FILL IN A TAX RETURN: Sort out your self-assessment - £418 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 - £431 million goes begging each year, £318 million through non-taxpayers failing to claim tax back on banks and building society savings accounts, and a further £113 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 HAVE ASSETS OVER £263,000: Plan your inheritance - an extra £1,586 million could go to chosen heirs by planning properly to avoid inheritance tax liabilities. This is 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: Top up your pension pot - £613 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 - £285 million is up for grabs for the 865,000 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 the lower rate taxpayer - £333 million could be saved in this way.

·         IF YOU GIVE TO CHARITY: £691 million more could go to good causes by using tax-efficient means of charitable giving, ie using a deed of covenant, Gift Aid or payroll giving.

·         IF YOUR CHILD IS ELIGIBLE FOR A CHILD TAX FUND: Avoid waste by using up the tax free saving potential - £10 million could be saved in their first year of existence.

Elms concluded, “Sitting down with a local independent financial adviser to discuss tax saving measures could make a huge difference, with very little effort.  Often the process of streamlining your finances is a lot simpler that you would expect and the rewards are well worth it.”  

As a first step to stamping out this waste, people can visit IFA Promotion’s dedicated website at www.taketaxaction.co.uk.  The site contains tips on how to save tax, an online tax wastage calculator, and a guide to saving tax, packed full of useful information.  People can also find details of local IFAs on the site or by calling 0800 085 3250.

-ends-

For further information please contact:

David Elms                           Richard Winder / Ali Richardson

Chief Executive                     Lansons Communications

IFA Promotion                       Tel: 020 7294 3641 / 020 7294 3679

Tel: 020 7833 3131              Email: richardw@lansons.com / alexandrar@lansons.com

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