With election fever on its way - and with tax a key topic on the agenda - a whopping £9 billion is set to be wasted in unnecessary tax payments this year, according to research by
Unbiased.co.uk the professional advice website.
At the same time, however, a third of Brits (33 per cent) will be considering tax policies before voting in this year's General Election, suggesting consumers are blissfully unaware of their tax apathy and the billions it costs them in reality.
Unbiased.co.uk's latest Tax Action report - now in its 18th year - reveals Britain's tax wastage has reduced by 9 per cent after reaching a peak of £10 billion last year.
Yet Unbiased.co.uk says 86 per cent of Brits still admit to doing nothing to reduce their tax burden. The largest areas for tax wastage are Tax Credits, where consumers stand to waste nearly £4 billion this year, followed by Inheritance Tax (IHT) at nearly £2 billion.
Despite the fact consumers are passively throwing away an annual tax wastage of £9 billion, the research reveals how Britons are preparing themselves for ‘taxation nation', with nearly a third (31 per cent) expecting taxes to rise substantially after the General Election.
A quarter of Brits (25 per cent) believe tax hikes will hit couples with young children hardest, and just over one in ten (12 per cent) think retired couples will suffer the most.
To prepare for an increased tax bill, nearly a third of cash strapped Brits (30 per cent) have cut down on everyday luxuries such as eating out in restaurants, and trips to the theatre and cinema.
A fifth of consumers are spending less on holidays (19 per cent) and a further fifth are shopping in ‘cheaper brand' supermarkets (20 per cent).
Apathy remains rife, however, as over half (53 per cent) are doing nothing to prepare for tax increases, says Unbiased.co.uk.
The Tax Action report reveals Greater London and the South East is the UK's tax waste capital, with over £2.6 billion wasted in tax - £1.2 billion of which is wasted in London alone. On the other hand, Northern Ireland has the lowest tax wastage with only £219 million being lost.
"A key way to waste tax is taking advantage of the tax incentives, reliefs and credits available to each person - and to avoid being hit by fines for basic mistakes, said Karen Barrett, Chief Executive of Unbiased.co.uk.
“Our annual Tax Action report has revealed an estimated £9 billion will be wasted this year in unnecessary tax payments and this is a colossal amount to be lost through error and avoidable circumstances.
“This equates to an average of £186 for each UK taxpayer - although this sum varies greatly depending on age and individual financial circumstances.
"Whilst it is encouraging to see our annual tax wastage is set to go down by 9 per cent this year, this decrease in tax wastage could also be down to the shrunken economy - with simply less disposable income for the tax man to get his hands on.”
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