May 30th Tax Freedom Day

Britain may now have a hung parliament, but on May 30th taxpayers can raise a toast to Tax Freedom Day, the notional point in the calendar year when we stop working for the taxman and start working for ourselves. However, research from unbiased.co.uk, the professional advice website, reveals many consumers will regard this alleged ‘tax freedom' as bittersweet - with nearly a third (31%) predicting substantial post election tax hikes.

Tax Freedom Day, calculated by the Adam Smith Institute, falls three days later this year than in 2009, largely because of the increase in VAT from 15% back up to 17.5% at the beginning of the year.  And as tax continues to be a key topic on the news agenda, unbiased.co.uk's latest Tax Action report reveals Britain's annual tax wastage this year is set to be a whopping £9 billion (See Table 1 below for full tax wastage breakdown), due to squandering tax breaks, reliefs and credits and paying fines for late or inaccurate tax returns.  But despite this huge tax wastage sum and predictions of tax hikes, a massive 86% of Brits still admit to doing nothing to reduce their tax burden.

Karen Barrett, Chief Executive of unbiased.co.uk commented: "This year's Tax Freedom Day reveals that for 149 days of the year - from January 1 to May 29 - every penny earned by UK residents will be taken to pay for government spending.  However, it has also been highlighted that this year's Tax Freedom Day could be viewed as misleading - as it is only based on tax receipts and doesn't takes into account the government's budget deficit.  This means, once the budget deficits have eventually been financed, this obligation will eventually fall on the shoulders of the UK's taxpayers.'

"By taking tax action to reduce your individual tax waste now, you will be able to offset some of the likely increase in tax burden - as well as ensuring you have your personal finances in order. Almost everyone can take tax action to bring their personal Tax Freedom Day forward, and sometimes a few simple steps can make a big difference. Seeking independent financial advice is the first step to take tax action - an independent financial adviser can assess your entire financial position and ensure you are being as tax efficient as possible.  Visit unbiased.co.uk's ‘find an IFA' service now to find a local, qualified IFA."