Many Britons paying
too much tax

Ignorance of the country's tax rules is the main reason why many Britons don't minimise the amount they shell out in tax, it has been claimed.

A survey by investment group Fidelity International found 38% of people had not made any moves to minimise their tax bill in 2009, such as by opening an Isa.

Some 15% did not know which tax band they were in, and of those who claimed they did know, more than 26% with taxable income over £50,000 believed they only paid the basic rate (20%) tax.

Paul Kennedy, head of tax and trust planning at Fidelity, said: "We believe everyone should have some level of understanding about their own position, otherwise they could be throwing money away".

By taking simple steps like sheltering savings in a tax efficient wrapper like an Isa, making regular pensions contributions and making the most of capital gains tax allowances, people in all tax brackets can shelter a significant amount from the taxman.

Fidelity said basic rate tax payers could keep 31% more of their returns by investing using an Isa wrapper. A higher rate taxpayer would benefit even more, keeping 84% more. Those to be hit by the new 50% rate would see the Isa produce 126% more.

Copyright © Press Association 2009
All articles are copyright The Press Association 2009. News articles provided by The Press Association for Family Investments. Whilst every care it taken to ensure accuracy of editorial content, Family Investments takes no responsibility for any errors or omissions. The views expressed in these articles are not necessarily those of Family Investments.

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