Tax Freedom Day falls on 2nd June

UK taxpayers will celebrate a special day - Tax Freedom Day, the day which marks the theoretical point in the year at which we stop working for the government and start working for ourselves. It falls on the 2nd June this year, which is one day earlier than last year.

Unbiased.co.uk, the organisation promoting the benefits of independent financial advice, is urging individuals to take action and reduce the amount of tax they pay each year to bring their personal Tax Freedom Day forward. With an average of £183 wasted on unnecessary tax liability per person this year, which is a massive 14% increase on last year, action is urgently needed.

David Elms, Chief Executive of unbiased.co.uk commented: "Tax Freedom Day is a key date in any UK taxpayer's diary as it highlights just how much time we spend working for the taxman each year. By taking tax action now and ensuring that your finances are as tax efficient as possible you can move your personal tax freedom day to earlier in the year and reduce your tax burden as well!"

IFA Promotion's annual TaxAction campaign, now in its sixteenth year, reveals that the UK as a whole will waste £9.3 billion this year in unnecessary tax. However, despite 34 million of us claiming to be dissatisfied with the current tax system, over 80 per cent (82%) admit to doing nothing to help reduce their tax payments.

David Elms continued: "Everyone can take action to bring their personal Tax Freedom Day forward by following a few simple steps. Why not find an independent financial adviser in your area, who will be able to review your financial situation to ensure you only pay the tax you have to!"

Here are ten simple steps to follow to stamp out this tax wastage for good:

IF YOU HAVE ASSETS OVER £312,000: 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 - £479 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 TOWARDS A PENSION: 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 year of existence.

As a first step to stamping out this waste, visit IFA Promotion's dedicated website at taketaxaction.co.uk. The site contains tips on how to save tax, an online tax wastage calculator, and a guide to saving tax.