Tax planning news
Most Britons pay too much tax
1 June, 2006
Four out of five UK adults will pay more tax than they need to this year, according to a new report.
TaxAction, an annual report commissioned by IFA Promotion (IFAP) found that the average UK adult will squander £155 this year in tax. This means a total of £7.6 billion will be overpaid in tax in 2006 - £1.8 billion more than in 2005.
The report found that despite 31 million 70 per cent of us claiming to resent rising tax bills, over three quarters 78 per cent of UK adults admit to doing nothing to help reduce the amount they pay.
IFA Promotion's study also reveals that the biggest area of tax waste (£2.9 billion) stems from the tax credits system, overtaking inheritance tax (IHT), which has been the biggest area of waste for several years.
David Elms, chief executive of IFAP comments, "Whether through apathy or confusion, the failure to claim tax credits is just one way we're gifting unnecessary and vast sums of money to the taxman each year.
He suggests that people take simple steps to stamp out tax waste, such as non-taxpayers filling in a simple form, married couples making sure they use up both tax-free personal allowances, or people simply submitting their self-assessment forms on time.
“Over the past few years, the onus for managing tax affairs has shifted increasingly to the individual, but our awareness and action is not keeping pace, and so the mountain of tax waste keeps growing," says Elms.
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