Mr Taxman, have pounds 5.5bn
Through ignorance, laziness or bewilderment, British taxpayers hand huge amounts of money to the Revenue each year. Nic Cicutti finds the leaks
Wednesday 29 January 1997
Meanwhile, in the build-up to the general election, the Labour and Conservative parties are accusing each other of secret plans to increase the taxes we pay.
Robert Browne-Clayton, chief executive at IFAP, says: "It is still too early to say what effect the general election will have, but it is clear that higher taxation is likely, no matter which party is in power.
"The amount of money paid unnecessarily to the Inland Revenue each year is staggering. Taxpayers must get their financial affairs in order before they start paying more."
The amount we waste amounts to about pounds 158 per person per year, according to IFAP's survey, carried out on its behalf by Mintel, the research organisation.
Mintel analysed data supplied by the Inland Revenue's own Personal Income Survey to arrive at its own assessment of how much unnecessary tax is paid.
Up to pounds 1.04bn is wasted by taxpayers with long-term bank and building society accounts who do not have Tessas and 5.3 million non-taxpayers who have not registered to receive gross interest;
Some pounds 867m is wasted in inheritance tax because we do not plan ahead and use a combination of tax avoidance measures to minimise our bills;
More than pounds 870m is wasted by not paying company bonuses through profit- related pay schemes, at least until 1998, when they are due to peter out over a two-year period;
A further pounds 767m is shelled out by unit and investment trust holders - and many shareholders - who do not make full use of their personal equity plan allowances. Peps allow savers to roll up profits on investments free of capital gains and income taxes;
Up to 1.4 million people, including many married couples, "mislay" an additional pounds 607m, simply by failing to claim their allowances where only one person is working;
Higher-rate taxpayers who are members of company pension schemes waste pounds 419m by not making the best use of their pension top-ups, called additional voluntary contributions (AVCs) or free-standing AVCs;
Unnecessary capital gains taxes paid by small shareholders who do not use their exemptions properly, or fail to use their CGT-exempt Peps, cost pounds 318m;
A combination of Inland Revenue error and interest and penalties incurred for late payment of tax cost up to pounds 215m;
Almost pounds 160m is paid into endowment policies by savers who do not have a friendly society policy, which would be tax-exempt up to pounds 25 a month. Higher-rate taxpayers who buy life assurance but do not use tax relief by linking it to a personal pension contribute to this amount;
Charity donations that are not made through Gift Aid, the tax-free vehicle introduced by the Government in 1987, add a further pounds 119m, while the final pounds 97m comes from investors who opt for National Savings products or gilts but fail to reclaim tax they are entitled to or choose the wrong product.
Mintel also looked at self-assessment, a reform to be introduced by the Inland Revenue in April this year. Potential pitfalls of the system include the heavy penalties likely to be levied if taxpayers fail to fill in their forms correctly and on time.
Mintel looked at a trial carried out by the Inland Revenue in Leicester in 1995, where a significant proportion of the forms were sent in late or contained errors. Based on the Leicester sample, Mintel estimates the additional unnecessary costs to be borne by the taxpayer could reach pounds 1.4bn. This is disputed by the Inland Revenue, which argues that its system has been refined in the light of the trials and is now among the simplest and easiest to understand in the worldn
For a list of three IFA Promotion-backed independent financial advisers near your home or place of work, call 0117 971 1177. However, remember that the advisers are not screened for their tax expertise. Be sure to ask them what their qualifications are.
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
The best deals on personal loans: Peer-to-peer providers are more competitive for smaller sums
China stock collapse: Five things you need to know about 'Black Monday'
Questions of Cash: 'Our dividends seem to have disappeared when TSB was bought and then born again'
My Tinder date asked for a refund when I declined a second meet up
The most expensive cities in the world 2015
- 1 Rules on 5p plastic bags likely to lead to arguments at the check-out
- 2 Hulk Hogan wants to be Donald Trump's running mate in the US Presidential election
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Tony Blair attacks Jeremy Corbyn's 'Alice In Wonderland' politics
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...
Day In a Page
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.