by Steve Sims
16:53 PM, 28th February 2011, About 13 years ago
Guest Blog provided by Steve Sims, author of ‘Understanding And Paying Less Property Tax For Dummies’. Steve and his wife Amanda also have a boutique accountancy business which specialisis in providing taxation advice and accountancy services for property investors.
Taxpayers who can’t be bothered to work on their financial affairs are gifting the government £13.5 billion a year.
The money comes from unclaimed reliefs and allowances and the payment of unnecessary taxes.
Even big business is to blame for getting their taxes wrong as BP has launched a lawsuit against HM Revenue and Customs to reclaim around £300 million paid in error in 1999 on stamp duty when buying out a US petrol chain ARCO – although corporation tax is not included in the total tax waste figure.
Top of the list for families and individuals is failing to claim tax credits – with about £8.5 billion lost in unclaimed child benefit, child tax credits, working tax credits and pension credits.
Next comes inheritance tax with estates handing over £1.3 billion in tax that was paid by mistake or was avoidable with basic tax planning.
9 out of 10 do nothing to pay less tax
Taxpayers could avoid paying billions more in tax if they had simple strategies in place to deal with failing to structure giving to charities, family or loved ones (£1.05 billion); incorrectly calculating income tax and self assessment (£825 million) and misunderstanding capital gains tax (£148 million).
The biggest offenders are women – with only one in 10 actively putting any tax strategy in place, says the Tax Action Report from independent financial advice site unbiased .com.
The report slams taxpayers for their apathy, blaming over a quarter (28%) for not knowing how to go about being more tax efficient and one in ten (12%) who simply cannot be bothered to pay less 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.”
Professional tax help for landlords
Amanda Sims, of Yardleystar Property, feels that the tax sums do not add up for most landlords because they do not keep good financial records that can pinpoint areas where they can pay less tax.
“Time and again we see landlords who have lost track of their finances over two or three years and have failed to structure their property businesses to take advantage of reliefs and allowances that would save them money,” said Amanda.
“In these times of austerity where every penny counts, I would urge these buy to let property investors to put their affairs in order so they can increase the cash in their banks without having to do anything to earn more.”
Click HERE to contact Yardleystar Property for help with your property tax
If you need a property business check or help keeping financial records and preparing tax returns, a link to Steve’s web-site can be found HERE.