The annual, industry renowned Tax Action campaign is here again for 2013 brought to us by unbiased.co.uk and this year to be supported by TaxCalc. The 21st year of this campaign looks at how much money is wasted in the UK by not being tax efficient and this year it highlights four individual areas of tax waste.
The research revealed
Tax Action 2013 research revealed consumers are set to gift an unnecessary £4.6 billion covering these four key areas:
1. Tax relief on pension contributions
- £2.6 billion2 is the combined amount of tax allowance taxpayers could benefit from if they saved into a pension
- £150 million2 rise in pension waste from unused pension tax allowance from 2012
- 28%3 of unbiased.co.uk advisers think pensions tax relief if the most confusing tax
- 4.3 million adults are not contributing to a pension but are considering it.
2. Savings on inheritance tax (IHT) by putting life policies under trust
- £472 million2 is the overall individual inheritance tax wasted by not placing life protection policies ‘under trust’
- £24 million2 rise in inheritance tax waste from 2012
- 31%3 feel IHT is the most confusing tax
3. Making use of Individual Savings Accounts (ISAs) for cash or stocks and shares investments
- £1.4 billion2 is the total amount savers are set to lose out on by not being ISA efficient
- £1.3 billion wasted through tax efficiency when is comes to cash savings,
- £62 million wasted by not holding investments with a stock and shares ISA
- 238%2 increase in tax wasted this year compared to last year
- 35%3 of unbiased.co.uk advisers think we are seeing a trend towards ISAs becoming the preferred model of saving
4. Savings on Capital Gains Tax (GCT) by using ISAs to shelter investments
- £171 million2 wasted in unnecessary CGT payments
- £38 million2 rise in CGT waste from 2012
- 32%3 of unbiased.co.uk advisers think CGT is the most under used tax allowance
Be tax efficient
Nobody wants the tax man to reap the benefits of our hard earned cash, yet 68%1 of Brits admitted to doing nothing to reduce the amount of tax they pay in our recent poll. We want to encourage consumers to seek professional advice for their tax planning needs, in order to make sure they are using all the right tax reliefs available to them, and to get the nation taking Tax Action!
Ensure you are tax efficient and avoiding waste by speaking to us and we can help you come up with a plan.
To find out how much tax you could be wasting, try this tax waste calculator – you might be surprised!
1The unbiased.co.uk web poll asked: Have you taken any steps in the last 12 months to reduce the amount of tax you pay? 68% said no. (base: 102 consumers visiting unbiased.co.uk)
2 2013 Tax Action research has been carried out by Opinium Research on behalf of unbiased.co.uk and TaxCalc
3 unbiased.co.uk survey of 102 advisers