Rising house prices subside as Council Tax becomes most talked about financial topic (Consumer)

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Rising house prices subside as Council Tax becomes most talked about financial topic (Consumer)

• 65% of people “chew the fat” over the cost of Council Tax with family & friends
•  Rising house prices continues to be a hot topic as 63% of adults raise the issue in conversation
• One in four people (24%) chat most about “death-duty” tax
• Ironic imbalance of behaviour identified – despite financial issues being hot topics with friends and family, we fail to take action

The hot topic of rising house prices is subsiding as Council tax takes its place as the most talked about financial topic, with almost two thirds of people (65%) saying this is the most talked about issue with family and friends, according to the latest findings from Unbiased.co.uk.   

The latest TaxAction report, which focuses on the UK’s tax wastage, sees Council Tax topping the financial discussion bill, closely followed by rising house prices and the so called ‘death duty’ (IHT).

However despite talking about ever-increasing taxes - over £7.9 billion is set to be wasted in 2007 - people are still not taking action with 74% admitting they do nothing to reduce the money they give to the taxman. This means UK adults are currently throwing away an average of £160 each on tax in 2007, a rise of 68% in five years from £95 per person in 2002.

Tax - and its growing drain on UK households - is increasingly moving to the top of the individual’s agenda with personal tax levels soaring to a collective £149 billion, up from £40.5 billion over the past 20 years, for all UK adults.

Yet wasting this money – and trying to save it from the taxman’s grip - doesn’t even enter the personal finances debate for many people.

David Elms, Chief Executive of Unbiased.co.uk comments, “It’s no surprise that Council Tax is dominating discussion across the UK as people mentally prepare themselves for the probable increase of re-banding costs. However, while financial issues continue to be the ‘top topic’ of conversation with family and friends, the irony is that many people are still needlessly wasting their money due, to a lack of understanding and guidance.

“No one likes paying taxes and this is evident with as many as two thirds of us saying we resent rising taxes. The onus is, more than ever, on the individual to get their financial affairs in order, and when it comes to tax, there are a number of simple steps people can take to reduce the amount the Chancellor takes from them.  Time spent filling in a form, or making a will, or ensuring savings are protected by an ISA, take relatively little time, but will probably be some of the most effective minutes you will have for a long time. 

“Since we launched TaxAction fifteen years ago, we have seen a steady increase in the amount of tax we throw away. This year’s report shows we waste £7.9 billion, the highest since the campaign began. People who want to reduce the amount they waste should visit an independent financial adviser who can show you how to become tax savvy with your finances.

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

-ends-

* Survey for IFA Promotion by YouGov, using a sample of 2610 people in February 2007.

** TaxAction 2007 report produced for IFA Promotion by RAKM, based on a specially commissioned analysis of Inland Revenue and a range of other official data sources.

Tax doesn’t have to be taxing – Here are 10 basic ways to claw back some of the waste:

• IF YOU HAVE ASSETS OVER £285,000: Plan your inheritance - an extra £1.5 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 - £382 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 - £2.3 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 - £463 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 - £546 million goes begging each year, £322 million through non-taxpayers failing to claim tax back on banks and building society savings accounts, and a further £224 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 - £739 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 - £171 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 - £510 million could be saved in this way.

• IF YOU GIVE TO CHARITY: £1 billion 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 byusing up the tax free saving potential - £125 million in tax could be saved in their first year of existence.

For further information please contact:

For expert comment or case studies from over 200 media-friendly IFAs, journalists should call unbiased.co.uk’s Media Services hotline on

020 7294 3682 or search online at www.unbiased.co.uk/media

1.      Independent Financial Adviser Promotion

Unbiased.co.uk is the consumer brand of IFA Promotion, the organisation established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents around 9,000 firms of independent financial advisers across the UK, incorporating over 17,000 registered individuals. These individuals hold over 20,000 incremental qualifications which are each individually verified by the awarding body. IFA Promotion welcomes the prominent display of incremental qualifications and further developments into the credentials of independent financial advice. 

IFA Promotion is sponsored by 30 leading financial institutions, and in the past 12 months, over 600,000 consumers and businesses used unbiased.co.uk to find local independent financial advice.

IFA Promotion believes Independent financial advice should be:

• Affordable. The option to take independent financial advice should be available, by right, to all- not just the wealthiest in society.

•  Convenient. IFAs should be available in the location of the consumer’s choice, wherever they live in the UK.

• Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who is not.

2.      Independent Financial Adviser Promotion’s sponsors

Registered Office: IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606

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