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Pockets are unnecessarily threadbare
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Cash Payment Savings Destroyed by ‘Needless’ Taxes
Writes Dan Drage dan.drage@consumerchoices.co.uk
Consumers who make savings by paying in cash are having the benefits wiped out by ‘needless’ taxes, according to a new survey.
The survey, commissioned by unbiased.co.uk, shows how one in every four consumers save themselves an average of £97 each year by paying for services in cash, thus avoiding VAT.
However, on the other side of the coin, consumers waste an average of £290 a year on unnecessary tax payments.
These wasteful tax payments include the much maligned inheritance tax, with a total of £1.9 billion, £360 million more than 2007, expected to unnecessarily pour into the Treasury due to a failure to mitigate inheritance tax.
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"Consumers waste an average of £290 a year on unnecessary tax payments"
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Additional wastage was brought about by failures to capitalise on available tax credits, fines for late tax returns, not using capital gains tax allowances effectively and choosing not to shelter investments in tax free ISAs.
Chris Eagle, Commercial Manager at Credit Choices, says saving yourself money through tax awareness needn’t be a painful process:
‘If you feel that you’re being over-taxed at work, and the tax office is known to make mistakes, take the matter up with your accounts department or designated tax office’
He continues:
‘For those of you who fill out tax returns, be aware that the fine you’ll receive for submitting these returns late is likely to cancel out any money you save from VAT avoidance. Moreover, those with a standard savings account may consider switching to an ISA in order to take advantage of tax breaks on your savings.’
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