Brits are paying almost £13bn in unnecessary tax
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.We'll hand over around £12.6bn unnecessarily to the tax authorities this year, writes Simon Read.
That's because many of us fail to use tax allowances, such as tax-free Individual Savings Accounts. You can shelter up to £10,680 in an ISA before 6 April this year, although the allowance falls to half that – £5,340 – if you don't want a stocks and shares ISA, just a cash ISA.
Each taxpayer is set to waste an average of £421 in tax in 2012, according to the financial advice website unbaised.co.uk.
The biggest area of tax wastage is through tax credits. Because people don't claim their allowances – such as tax credits, working tax credits or pension credits – some £7.26bn is lost to the Chancellor, George Osborne, right, each year. Meanwhile, failure to make use of tax relief on pension contributions wastes more than £2.45bn.
Charity supporters also miss a trick when giving to good causes. Failure to use the tax-efficient Gift Aid scheme means almost £1bn of extra cash goes to the Treasury rather than chosen charities.
Other areas where poor tax planning means handing over millions to the Government include inheritance tax – where an extra £448m is lost – and child benefit, where the total is £401m. Many are also failing to make use of their annual capital gains tax allowance of £10,600 a year.
Karen Barrett, chief executive of unbiased.co.uk said: "Tax affects pretty much everyone, 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."
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments