Britons gifting the taxman £12bn a year - Money - News - Moneyfacts

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Britons gifting the taxman £12bn a year

Britons gifting the taxman £12bn a year

Category: Money

Updated: 14/12/2012
First Published: 02/03/2012

MONEYFACTS ARCHIVE
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Britons are set to gift the taxman more than £12 billion this year, new figures have revealed.

The surprising research comes despite the ongoing strain on consumer finances, with families up and down the land tightening their belts.

Research by unbiased.co.uk has found that as a nation we are set to deliver £12.6 billion in unnecessary tax to the taxman in 2012 – the equivalent of each taxpayer throwing away £421.

It means that Britons have handed over a total of £88.6 billion in the last decade, with 2012 set to represent the second highest wastage figure in that time – beaten only by the £13.5 billion last year.

The biggest area of tax wastage in 2012 is through tax credits, resulting in £7.26 billion being lost through people failing to claim their child tax credits, working tax credits and pension credits.

Failure to make use of tax relief on pension contributions is the second biggest area of tax wastage (over £2.45 billion), followed by tax inefficient charitable donations (over £997 million).

People are also guilty of wasting money on child benefits, using ISAs, income tax and personal allowances.

But despite the billions being unnecessarily served up to the taxman, 85% of people have done nothing to reduce the amount of tax they pay.

Of the 15% of Brits who have taken steps to reduce the amount of tax they pay, two in five (40%) have changed the way they save or invest their money, while over one in five (22%) have made a specific tax efficient purchase or investment.

"Looking back at the last decade and the tax wastage figures in our reports, the numbers are just as shocking now as they were then," said Karen Barrett, chief executive of unbiased.co.uk.

"This year marks our second highest tax wastage figure on record, only marginally falling from a record high last year.

"The message is clear - tax affects pretty much every one of us and with an average of £421 up for grabs for each taxpayer, we should take some time and effort to ensure that we are being as tax efficient as possible."

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