Lazy taxpayers are gifting easy money to the government because they make mistakes or just are not bothered about claiming tax refunds.
HM Revenue and Customs picked up a staggering £13.5 billion last year in overpayments and unclaimed reliefs and allowances from individuals.
Even multinational companies make mistakes – as oil giant BP admits paying £300 million too much in stamp duty when taking over a US service station chain in 1999.; The firm has launched a lawsuit against HMRC to recover the cash plus interest.
More modest individual taxpayers are missing out on their share of £8.5 billion of tax credits and child benefits earmarked for families, individuals and pensioners that is sitting in the government’s bank account waiting to be paid.
Other unnecessary tax payments add up to around £5 billion a year made up of:
- £1.3 billion of inheritance tax
- £1.05 billion in charitable giving
- £825 million in income tax and self-assessment payments
- £148 million of capital gains tax
Most of the tax was paid by mistake or was easily avoided with some basic tax planning.
Women are the worst at paying unnecessary tax – with only one in 10 planning to pay less tax, says the Tax Action Report from independent financial advice site unbiased .com.
Men may not be as bad, but are included in the one in four (28%) fwho do not knowing how to go about avoiding unnecessary tax and the one in ten (12%) who are not bothered about saving tax.
“Despite the increase to Britain’s tax waste mountain this year, a massive 88% of people state they have done nothing in the past 12 months to reduce the amount of tax they pay, “ says the report.
“Shockingly, of those who have not taken any steps over the past 12 months to become more tax efficient, 45% state that was because they believe they are already being as tax efficient as possible. However, these new stats reveal otherwise.”
