Failure to claim back overpayments of tax has resulted in UK residents losing out on £322m in 2007, research suggests.
The study, by Unbiased.co.uk, also says the average income tax liability has doubled since 1990 and now stands at £4,200.
In addition, it suggests the total number of taxpayers has increased by 14% since 1989/90 but, in that same period, tax liability has rocketed by over 171%.
Finally, Unbiased.co.uk points out a total of £224m is lost in tax by those who don’t transfer deposits to their lower taxed partners.
David Elms, chief executive of IFA Promotion, says all tax-payers must act now and claim back this “unnecessary” over payment of tax.
“It is easy and straightforward to reclaim any overpaid taxes that have been deducted inaccurately, by filling out an R85 form,” he says.
“Over-paid tax can be reclaimed from the HMRC up to five years previous so it isn’t too late if you think you have been paying too much.”
Partners on different tax allowances can spread income from sources other than employment between them to avoid paying too much tax, he adds.
If this was followed, Unbiased research suggests that, between the 1.6 million non-taxpaying partners in higher-income households, £224m would be saved.
“The transfer of assets between partners subject to different tax rates can result in the reduction of tax liability and can provide an extra slice of savings for many households,” Elms says.
“With individuals being taxed on pensions, interest from banks, dividends from shares and income from property there are many different sources of income that can be shared between a couple to avoid paying un-necessary tax.”
020 7034 2636
100 new clients
Achievements, charity work and other happy snippets
Square Mile’s series of informal interviews
Partner Insight: The rise in demand for DFM and multi manager solutions has been largely driven by new mandates from the regulator, says James Bampton, head of UK intermediary distribution at Architas