UK Cash in Hand Payments Top 6.6 Billion
4 June 2008
UK Cash in Hand Payments Top 6.6 Billion
- 1 in 4 UK adults admit to paying cash for a product or service within the past year
- Twelve million consumers admit to fuelling the black economy to the tune of £552 each over the past 12 months
- Though happy to contribute to this huge amount of non-taxed income, UK consumers wasted £9.3 billion in tax overpayments last year
- Visit www.unbiased.co.uk/taketaxaction to see how YOU could start saving tax within the boundaries of the law!
UK adults fuelled a black economy worth over £6.6 billion over the past year, according to the latest TaxAction report from Unbiased.co.uk. The report found that 1 in 4 UK adults (or 12 million people) have paid for a product or service with cash in the past twelve months, at an average level of £552 each. Unbiased.co.uk calculates that this puts the level of contributions to the black economy by UK consumers over the past 12 months at £6.6billion.
The TaxAction report from Unbiased.co.uk, the Find an Independent Financial Adviser Search shows that UK adults paid over £9.3 billion too much tax last year, a record amount for the sixteen years the campaign has been running. Unbiased.co.uk encourages consumers to take tax action legally, by claiming all tax credits due to them, completing self-assessment forms correctly and making use of ISA and income tax allowances.
David Elms, Chief Executive of Unbiased.co.uk comments, “It is staggering that 1 in 4 UK consumers will happily save themselves an average of £97 in tax by paying for services in cash, thus avoiding VAT, but continue to waste an average of £290 per year in unnecessary tax payments. Our TaxAction report is now in its sixteenth year but the total level of waste continues to rise. The fact that UK consumers take the risk of funding the black economy to the tune of £6.6billion but will not save themselves the £9.3billion identified in our report means that the job of the Independent Financial Advisers and accountants to advise clients on sensible tax planning is more pressing than ever.”
Tax doesn’t have to be taxing – Here are 10 basic ways to claw back some of the waste:
- IF YOU HAVE ASSETS OVER £300,000: 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 - £460 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.
David Elms concluded, “With more and more people feeling the pinch in the current financial climate it is surprising to learn just how much we are willing to risk to save money when we already throw away so much tax in unnecessary payments. While tax can be a confusing topic, help is at hand. Through www.unbiased.co.uk/taketaxaction a local IFA can help you discover where you can make significant savings on your tax burden.”
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-
** 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.
For further information please contact:
|
David Elms |
Anna Schirmer/Jonathon Grove |
|
Chief Executive |
Lansons Communications |
|
Unbiased.co.uk |
020 7294 3682 |
|
020 7833 3131 |
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 22,000 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 28 leading financial institutions, and in the past 12 months, over 575,000 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
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Abbey for Intermediaries |
Lincoln Financial Group |
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Aberdeen Asset Management |
Lutine Assurance Services |
|
AEGON Scottish Equitable Plc |
National Savings & Investments |
|
Alliance Trust |
New Star Investment Funds |
|
AXA Life |
Norwich Union Life |
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Bright Grey |
Prudential |
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Canada Life Ltd |
Scottish Life |
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The Children’s Mutual |
Scottish Life International |
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Clerical Medical Investment |
Scottish Widows Plc |
|
Defaqto |
Skandia UK Group |
|
Friends Provident |
Standard Life Assurance Company |
|
The Hartford |
Tomorrow |
|
Invesco Perpetual |
Unum |
|
Legal & General |
Zurich Intermediary Group |
Registered Office: IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606
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