New research1 released today by unbiased.co.uk, the UK’s most comprehensive ‘find an adviser’ search, in partnership with Prudential, reveals UK taxpayers are set to waste as much as £4.9 billion this year in unnecessary tax payments. The 2015 unbiased.co.uk TaxAction research shows Brits are set to gift nearly £200 million more to the taxman, compared to 20142, by not making the most of tax reliefs available to them, or by not using tax-efficient savings products.
The research looks at four key areas of tax waste:
The £4.9 billion set to be wasted this year translates into £165 on average3 per individual taxpayer, up from £161 in 2014.
Area of tax wastage |
£ amount of wastage 2015 |
£ amount of wastage 2014 |
Tax relief on pension contributions |
£2.9 billion |
£2.9 billion |
Cash and stocks and shares ISA allowance |
£1.3 billion |
£1.1 billion |
Inheritance tax |
£550million |
£530 million |
Capital gains tax |
£158 million |
£154 million |
Les Cameron, tax specialist at Prudential, comments:“Busy lives and ever changing tax rules mean that tax planning may not always be at the top of many people’s to-do lists. But by failing to plan efficiently, many of us are simply not maximising the available value of our hard-earned savings.
“Making the most of your money is primarily about the right investment choices, followed by the best use of the various tax reliefs and allowances on offer. Put simply, greater tax efficiency increases the prospect of a better return.
“Everyone’s circumstances are different so it’s important to seek professional financial advice for a review your own situation and to make the most of the available tax breaks.”
Karen Barrett, Chief Executive of unbiased.co.uk, comments: “unbiased.co.uk and Prudential’s 2015 TaxAction research shows a significant rise in the amount of tax set to be wasted this year compared to 2014. Shopping around for the best deal continues to be put forward as the solution for everyday items, but many consumers have still not reaped the benefits for their finances. Millions of UK taxpayers are putting their money into taxed saving and investment products, when there are substantial reliefs, allowances and better rates readily available.
“Changes to tax legislation, as well as the new pensions freedoms, make it seem less stressful to take no action, but there are simple steps that will make a real difference to your finances. Tax is an area where professional advice can make a real difference, over both the short and long term. Those looking for advice should speak to a professional financial adviser or an accountant, to ensure they are being as tax efficient as possible. For a free and confidential search for a financial adviser or accountant, go to www.unbiased.co.uk.”
The nation’s tax wastage 2015 – the key statistics:
£2.9 billionin pension tax relief waste
£1.3 billion in ISAs
£550 million in inheritance tax waste
£158 million in capital gains tax
Prudential and unbiased.co.uk have together produced a handy guide to allowances and requirements for pensions tax relief, inheritance tax, ISAs and capital gains tax. The guide can be viewed on the unbiased.co.uk Tax Action 2015 site: https://www.unbiased.co.uk/tax-guide.pdf
ENDS
Notes to editors:
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Category: Tax planning Tagged: Inheritance Tax, ISAs