How much tax are you wasting?
We have all heard about people who do not pay their taxes and who buy into risky, legally dubious and just outright illegal schemes to reduce their tax bills. However, a recent article on unbiased.co.uk states that UK taxpayers are paying £4.9 billion more tax than they are legally required to do.
The ‘tax waste’ averages out at £165 per taxpayer per year. This has risen from £161 in 2014 and £153 in 2013. So if we assume our average Joe retires at 65 and works from the age of 18, and assuming the average amount stays the same (although the figures suggest it’s actually likely to rise), it means that our hardworking tax payer is unwittingly making a £7,755 gift to the government over his working life. That’s money that most of us can find other uses for!
This money is lost through: not using pensions or ISAs efficiently, paying unnecessary capital gains tax and not taking advantage of all the inheritance tax reliefs and allowances available.
Nicola Sunderland is a trust and estate planning practitioner within the private client department.