UK working 2 days longer to pay tax in 2015
TAXPAYERS in the UK are working 2 days
longer on average in 2015 than in 2014 before they stop paying taxes and start
earning for themselves, warns ACCA (the Association of Chartered Certified
Accountants). Tax freedom day; calculated annually by the Adam Smith Institute; falls on 31 May
2015.
The date at which tax freedom day arrives has been steadily rising and the
overly complicated nature of the UK tax system; especially with the sheer
number of indirect taxes that exist; means UK households are now left with less
money and are paying more to the government. This is despite 5 years of raises
in personal allowance.
Chas Roy-Chowdhury, ACCA head of taxation, said:- "The rises in the
personal allowance have created a huge amount of fiscal drag. More and more
people are being caught in the 40% tax bracket. At the end of the 1980's, only
500,000 people were paying the higher rate of tax, now that is more than 4
million people. So despite all the Government hype on increasing the personal
allowance we are actually 2 full days worse off this year before our income is
ours to keep.
Despite large cuts to the public sector the government is needing more and more
money to keep public services going, a bill that has to be paid for by all UK
taxpayers. Individuals are well within their rights to take steps to legally
reduce their tax burden. ISAs are the perfect example of one method they can
use."
Other steps include:-
► Claiming all benefits and allowances:- Taxpayers' money is ploughed into a wide
variety of state benefits so make sure the state is giving you what you are
owed.
► Use gift aid:- As a UK taxpayer you are entitled to claim gift aid for any
charitable donations, so that the charity receives the full donations tax free.
Higher rate taxpayers can claim the difference between the higher rate of tax
and the basic rate on the total value of your donation.
► Check tax codes:- Be tax aware and make sure your tax code is correct. Some
people may be paying too much tax; without knowing it. If a tax code is
incorrect, the wrong amount of tax and deductions will be made. If you think
there is a problem with your tax code, contact HMRC.
► Consult a chartered certified accountant:- Tax is confusing, so when it becomes
too complex always consult chartered certified accountant.
