The latest Tax Action report from unbiased.co.uk has found that we will collectively waste £1.3bn in 2011 due to poor inheritance tax planning.
This tax waste is set to increase further in the future as the inheritance tax nil rate band remains frozen.
Overall, people in the UK look set to waste £13.5bn in tax during 2011, in a variety of ways.
Despite this, 88% of people have no plans to reduce the amount of tax they pay.
Inheritance tax comes in second place when it comes to wasted taxes, with tax credits taking the top spot with £8.54bn wasted due to ‘error waste’. This refers to tax which is only paid due to error or omission, much of which can be reclaimed once the waste has been identified.
Whilst tax evasion is illegal, tax avoidance is perfectly legal and should form part of an overall financial plan.
As a firm of Chartered Financial Planners, we work with our clients to ensure they do not waste tax. This is done mainly though simple identification of any wasted allowances or exemptions, or by restructuring investments for tax efficiency.
Where tax planning requirements are more complex, we work closely with specialist tax advisers to provide advice to our clients.
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