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Survey reveals £200m rise in individuals’ overpaid tax

Poor planning means taxpayers will have to fork out nearly £5bn in avoidable taxes in 2015, a rise of £200m on last year, research reveals.

Some £4.9bn is expected to be wasted this year through inefficient tax planning, about £165 on average per individual, data collected by Unbiased.co.uk and Prudential shows.

Tax relief on pension contributions is by far the biggest proportion of tax wastage, with 4.2 million workers not saving into a pension missing out on £2.9bn in unused pension tax allowance.

Savers are paying £1.3bn too much by not moving their money into Isas, while individuals are losing £550m to inheritance tax by not placing life protection policies under trust.

A survey of 2,000 adults also reveals nearly three quarters of taxpayers have not attempted to reduce their unnecessary tax spent over the last 12 months, with 45 per cent believing they already pay the minimum amount.

Unbiased.co.uk chief executive Karen Barrett says: “Changes to tax legislation, as well as the new pensions freedoms, make it seem less stressful to take no action, but there are simple steps that will make a real difference to your finances. Tax is an area where professional advice can make a real difference, over both the short and long term.”

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There are 2 comments at the moment, we would love to hear your opinion too.

  1. And let us not forget the £118m over-levied by the FSA on the intermediary community over a period of five years. Martin Wheatley has made no attempt to deny this, yet refuses to reimburse us a penny of it. The FCA would even argue that it has statutory immunity from prosecution in such matters, as it doesn’t fall within the decidedly woolly classification of reckless incompetence (notwithstanding that there’s been no shortage of that on the part of the regulator).

  2. Of course this is assuming that they have the spare cash/or willingness to contribute to a pension or ISA.

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