TaxAction 2014

UK taxpayers to waste as much £4.7 billion in tax inefficiencies

Our annual, industry-renowned TaxAction campaign is here again for 2014. The twenty second year of this campaign looks at how much money is wasted in the UK by not being tax efficient and this year it highlights four individual areas of tax waste:

• individual savings accounts (ISAs)
• tax relief on pension contributions
• capital gains tax (CGT)
• inheritance tax (IHT)

This year's research has found that as much as £4.7 billion is wasted every year because of tax inefficiencies. The report also found:

• £161: the average amount each individual taxpayer is set to waste 
• 77%: of people admit they haven’t done anything to reduce their tax waste in the last 12 months
• But 38% of Brits think they’d be confident in tackling their tax waste without the help of a professional
The £4.7 billion set to be wasted this year translates into £161 on average per individual taxpayer, up from £153 in 2013.

Although, 38% of the nation thinks they’d be confident in sorting out their tax planning without help of professional advice,’s research shows that three out of four (77%) Brits admit they haven’t done anything in the past 12 months to cut their individual tax waste figure, up from 68% last year. 


UK taxpayers’ tax wastage 2014 – the key stats:

£2.9 billion in pension tax relief waste

  • UK employees on average put away £3,260 annually into their pension, including £652 a year in tax relief from the government 
  • 4.4 million UK adults are currently in employment not saving into a pension and not making use of their pension tax allowance from the government resulting in £2.9 billion6 in tax relief set to remain unused this year
  • Anyone paying towards a pension receives tax relief on their pension savings at 20% and up to 45% according to the rate at which they pay tax.  If you are a higher rate taxpayer the onus is on you to claim back the additional tax relief owed to you 

£1.1 billion in ISAs

  • 49 million UK bank account holders are set to waste a combined total of more than £1.1billion by not moving their money into tax-efficient individual savings accounts (ISAs)
  • Of that wastage, £984 million can be attributed to failure to use cash ISAs and a further £160 million in stocks and shares investments not held in ISAs

£530 million in inheritance tax waste

  • £530 million wasted in inheritance tax (IHT) by individuals not placing life protection policies ‘under trust’
  • Not placing it under trust could reduce a £100,000 life insurance payout by as much as £40,000 if an individual’s total estate is worth more than £325,000
  • Only 27% of people would be confident in tackling IHT planning without the help of a professional adviser

£154 million in capital gains tax

  • £154 million in unnecessary capital gains tax (CGT) payments this tax year
  • 2014 Tax Action research shows one of the main areas of CGT waste occurs from people not using ISAs to shelter investments from any tax liabilities 
  • Each UK taxpayer has an annual CGT free allowance, which for the current tax year stands at £10,900.  Any gain above the allowance is charged at 18% for lower and 28% for higher rate tax payers

Be tax efficient

We want to encourage consumers to seek professional advice for their tax planning needs, in order to make sure they are using all the right tax reliefs available to them, and to get the nation taking TaxAction.

Ensure you are tax efficient and avoiding waste by speaking to an accountant or financial adviser  who can help you come up with a plan - use our postcode search to find one near you today.

To find out how much tax you could be wasting, try our tax waste calculator - you might be surprised!