Use those valuable tax breaks this year, says Fidelity

With UK taxes at such high levels, as savers and investors we owe it to ourselves now more than ever to get the full benefit from available tax breaks this year.

Fidelity International has calculated that with the increase to VAT and the proposed increase to National Insurance this year, a basic rate tax payer could soon be paying out over 43% in taxes on each new pound they earn and spend.  The story gets progressively worse for higher rate taxpayers and additional rate tax payers who are set to face a tax burden of 52% and 60% respectively.  Those earning just over £100,000 and caught in the personal allowance ‘tax-trap' face a staggering 68%.

Rob Fisher, Head of UK Personal Investments at Fidelity International, comments; "These figures will prove quite shocking to many of us.  The amount we are now paying in taxes is really significant and people must ensure they take advantage of every tax break available to them. 

"In particular, if you haven't already done so, look to open an Individual Savings Account (ISA) now.  The ISA is really a form of tax avoidance approved by the taxman - invest up to £10,200 each tax year in a stocks and shares ISA for example and all future returns are free of income or capital gains tax.  So don't delay and protect more of your hard earned cash from the heavy weight of the taxman in 2011."