• Britons become ‘tax free’ on Wednesday 28 May 2014 – average worker will spend 148 days of their salary on tax payments
• UK taxpayers are still set to waste as much as £4.7 billion in unnecessary tax payments this year
• Three quarters (75%) of people admit they haven’t done anything to reduce their tax waste in the past 12 months
• Make 28 May 2014 ‘TaxAction Day’ – unbiased.co.uk urges Brits to tackle their tax waste
On 28 May, Britons can take pleasure in knowing this year they will have worked enough days to stop paying everything they earn to the taxman and can start earning for themselves!
Falling two days earlier than last year, Wednesday 28 May marks ‘Tax Freedom Day’1, a notional date in the year when UK taxpayers will have earned enough income to pay off their annual tax burden to the state. The date is calculated annually by the Adam Smith Institute by adding up all the taxes paid by people in the UK and dividing by their incomes, this year taking the average UK worker 148 days of earning.
But research from unbiased.co.uk, the ‘find an adviser’ search, shows Britons are still leaving themselves open to unnecessary payments to the taxman when it comes to their savings and investments. Its annual TaxAction research shows UK taxpayers are set to gift £4.7 billion2 this year, over £100 million more compared with 20133, by not making the most of tax reliefs available to them or not using tax-efficient savings products. This translates into an average of £161 per person4.
Looking specifically at four key areas of tax – individual savings accounts (ISAs), pensions tax relief, inheritance tax (IHT) and capital gains tax (CGT) – the research shows the biggest area of tax waste is pensions, with £2.9 billion set to be wasted by UK taxpayers not using the pension tax reliefs available to them. A further £1.1 billion is set to be wasted in unused ISA allowances, £530 million will be wasted in IHT and £154 million in CGT.
Further to this, unbiased.co.uk’s research5 also shows three-quarters (75%) of people admit they have done nothing to reduce their tax waste in the past 12 months. Only 38% say they would be confident in sorting their tax planning without the help of a professional financial adviser6.
unbiased.co.uk comments: “Tax Freedom Day may be a notional date in the calendar but our research shows, when it comes to tax, people could be doing much more for their own financial benefit if they looked closely at their savings and investments. Our TaxAction figures show people are still not making the most of tax efficient savings and investment vehicles, despite tax reliefs, allowances and better rates being available to them.
“It can be easy to bury your head in the sand when it comes to tax and for many it’s a question of confidence. Our research shows only four in ten people think they’d be confident in tackling their tax burden without the help of professional advice. For those looking to make 28 May their ‘TaxAction Day’, a whole of market professional adviser is best placed to advise on responsible tax planning. They will advise you through the process, providing you with peace of mind and confidence that you are being as tax efficient as possible, ultimately reducing your tax burden. For a free and confidential search for a financial adviser or accountant, go to www.unbiased.co.uk.”
UK taxpayers’ tax wastage 2014 – the key statistics:
£2.9 billion in pension tax relief waste
£1.1 billion in ISAs
£530 million in inheritance tax waste
£154 million in capital gains tax
Notes to editors:
1. Tax Freedom Day is a floating date calculated every year (from 1 January) by the Adam Smith Institute: see www.adamsmith.org for details.
2. unbiased.co.uk commissioned Opinium Research to produce its TaxAction 2014 report. All figures are based on calculations done on unrounded values to guarantee accuracy; text paragraphs display rounded figures.
3. 2013 total tax waste is £4.6 million, TaxAction research 2013: http://www.unbiased.co.uk/tax-action-2013-infographic
4. Based on the average number of taxpayers, according to HMRC: http://www.hmrc.gov.uk/statistics/taxpayers/table1-4.pdf. This calculation is based on the overall amount of tax wasted across different groups of taxpayers, and while not every single taxpayer is affected in the same way, the average amount of £161 has been provided to show how much could be wasted across the UK population.
5. The unbiased.co.uk web poll asked: Have you done anything to reduce your tax liabilities in the last 12 months? 75% said no. (base:163 consumers visiting unbiased.co.uk between 28 January – 13 February)
6. unbiased.co.uk commissioned Opinium Research to produce its GetAdvised report. It was carried out 8 – 11 October 2013 among 2,000 nationally representative UK adults aged 18+
For more information contact:
Emily Falla / Kate Aitchison: 020 7294 3682
For expert commentary or case studies from over 200 media-friendly advisers, journalists should visit unbiased.co.uk Bluebook - the media adviser directory
LinkedIn: unbiased.co.uk - online networking for professional advisers
About unbiased.co.uk, the professional advice website:
unbiased.co.uk is the UK's most comprehensive free professional adviser search website, focused on empowering users with the resources they need to make better informed financial and legal decisions. We not only help consumers and businesses find the best adviser for their needs from 24,000 IFAs, financial advisers, mortgage advisers, solicitors and accountants listed on our search, but we also help them research the market by providing relevant information and tools. At unbiased.co.uk we are transparent about what we do and provide the easiest way for consumers to find and compare advisers meeting their requirements.
The unbiased.co.uk website launched in 1998 and rapidly became the UK’s leading online destination for consumers and businesses looking to find an adviser. Now attracting over one million visitors a year, unbiased.co.uk is the default adviser directory for consumer websites recommending their audience to ‘find an adviser’.
unbiased.co.uk has launched a new industry-facing website for the adviser community at business.unbiased.co.uk.
Unbiased Ltd promotes the benefits of financial and legal advice to consumers and businesses and would like to thank the following companies for their support:
|Canada Life Ltd||Royal London Group|
|Legal & General||Santander Asset Management|
|MetLife||Standard Life Assurance Limited|
|NEST||Zurich Intermediary Group|
Unbiased Ltd - Registered Office: 12-14 Berry St, London, EC1V 0AU. Registered in England: No. 06775878.
Category: Tax action Tagged: