Brits shell out nearly half their income on tax
Top tips to pay less tax
Wednesday, 08 Nov 2006 09:38
An independent financial specialist has put together top tips for UK tax payers to reduce the amount they pay.
The finance company finds Brits pay an average £11,700 tax each, almost 50 per cent of the average salary, but only 22 per cent do anything to reduce their bill.
"When people refer to tax they often just mean income tax however the wide variety of taxes that are imposed on British adults mount up to a staggering average bill of £11,700 per annum," said Adeline Christy of Kudos Independent Financial Services.
"These include VAT, road tax, council tax and fuel duty. As income increases so does the amount that is claimed by the treasury - a household earning £85,000 a year will pay the treasury in excess of £33,000 in tax."
Top tips for maximising tax efficiency
Contact an Independent Financial Adviser (IFA).
"It is best to approach an IFA as they will be able to provide you with tailored advice specific to your circumstances and goals," said Ms Christy.
Consider your options.
Ms Christy explained: "There are certain things which limit the available options in terms of where money can be invested. Consider the options which are open to you and to mitigate your tax bill be sure to fully utilise the options which offer tax efficient savings such as ISAs."
Be aware of investment risks
"When investing money you need to be comfortable with the level of risk that is associated with your investment. Your IFA should be able to tell you what level of risk is associated with different investment vehicles and this should help you to determine where you want to put your money," Ms Christy advised.
Save regularly
For those who do not have enough disposable income to be able to save regularly Ms Christy advises that making small changes can make a big difference.
"Choosing to save for a large purchase will not only result in extra capital being available for the purchase, as a result of interest being earned on the savings, but if the purchase would previously have been paid for on plastic then the interest that could have been incurred on the purchase will be obviated."
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