Britons set to waste £9 billion in unnecessary tax payments
With election fever on its way - and with tax a key topic on the agenda - exclusive research by Unbiased.co.uk, the professional advice website, reveals a whopping £9 billion is set to be wasted in unnecessary tax payments this year. At the same time, however, a third of Brits (33%) will be considering tax policies before voting in this year's General Election, suggesting consumers are blissfully unaware of their tax apathy and the billions it costs them in reality.
Unbiased.co.uk's latest Tax Action report - now in its 18th year - reveals Britain's tax wastage has reduced by 9% after reaching a peak of £10 billion last year. Yet conversely, a massive 86% of Brits still admit to doing nothing to reduce their tax burden. The largest areas for tax wastage are Tax Credits, where consumers stand to waste nearly £4 billion this year, followed by Inheritance Tax at nearly £2 billion.
Karen Barrett, Chief Executive of Unbiased.co.uk, comments: "During 2009, financial markets were in turmoil and cash strapped consumers were feeling the full force of the recession. And while things may be starting to look up in 2010, it is still vital for everyone to be looking at their finances and making sure they're not throwing money away unnecessarily. A key way to do this is taking advantage of the tax incentives, reliefs and credits available to each person - and to avoid being hit by fines for basic mistakes. Our annual Tax Action report has revealed an estimated £9 billion will be wasted this year in unnecessary tax payments. This equates to an average of £186 for each UK taxpayer - although this sum varies greatly depending on lifestage and individual financial circumstances."
Election fever predicts ‘taxation nation'
Despite the fact consumers are passively throwing away a vast annual tax wastage of £9 billion, the research goes on to reveal how Britons are preparing themselves for ‘taxation nation', with nearly a third (31%) expecting taxes to rise substantially after the General Election. A quarter of Brits (25%) believe couples with young children will be hit hardest by tax hikes, and just over one in ten (12%) think retired couples will suffer the most.
Consumers cut back in preparation for tax hikes
To prepare for an increased tax bill, nearly a third of cash strapped Brits (30%) have cut down on everyday luxuries such as eating out in restaurants, and trips to the theatre and cinema. A fifth of consumers are spending less on holidays (19%) and a further fifth are shopping in ‘cheaper brand' supermarkets (20%). However, apathy remains rife as over half (53%) are doing nothing to prepare for tax increases.
Unbiased.co.uk's Regional Tax Waste
The Tax Action report reveals Greater London and the South East is the UK's tax waste capital, with over £2.6 billion wasted in tax - £1.2 billion of which is wasted in the Big Smoke alone. On the other hand, Northern Ireland has the lowest tax wastage with only £219 million being lost.
Karen Barrett, Chief Executive of Unbiased.co.uk, continues: "Whilst it is encouraging to see our annual tax wastage is set to go down by 9% this year, £9 billion is still a colossal amount to be lost through error and avoidable circumstances. Furthermore, this decrease in tax wastage could also be down to the shrunken economy - with simply less disposable income for the tax man to get his hands on. Tax can seem a complex issue for many, and even more so in the current environment as people reassess their finances and the way they handle their expenditure. An independent financial adviser can assess your whole financial position and ensure you are being as tax efficient as possible. It is vital that people take Tax Action now and save money, so hopefully we can see our annual tax wastage continue to decrease. To find a local IFA near you, visit Unbiased.co.uk and use our free and confidential ‘find an IFA' search."