The Current Government promised that Taxation would not greatly increase under their leadership but a review of the figures published by HM Revenue & Customs' reveal that the Governments' share of what we earn has nearly doubled in value since Labour came to power.
I was looking at the statistics published by HM Revenue & Customs (HMRC) and despite the promises made by the Labour Government not to increase income tax it is clear that the PAYE (Pay As You Earn) tax receipts and other taxes have increased dramatically on a year on year basis.
Dealing with Income Tax deducted under PAYE the figures for 1997/98 show that some £67,041 million was deducted under PAYE by HMRC in the tax year 2008/9 this had amounted to £128,752 million a staggering crease of 92%. This equates to an average increase of 8% per annum compared with an average wage increase of only 5% per annum.
However many people pay more tax than they should and it has been estimated that some £9,000 million in tax is paid that does not actually have to be paid.
So what should you do to make sure that you or your family are not contributing to the nine billon that does not need to be paid?
Many of the ideas and suggestions are in fact obvious but many folks do not either have the time or perhaps the inclination to consider some of these points which is a great shame as over a very short time these savings can grow into quite large sums of money.
The first idea is to ensure that you have used up all your personal allowances. So funds permitting make sure that you use up the allowances for tax free savings and pension planning that you can.
If married or in a Civil Partnership and one of you has a lower level of income then you could transfer income producing assets to the partner who has the lower income.
The allowance for ISA (Individual Savings Account) has been increased for the tax year 2009-2010 to £10,200. For those over 50 half of that allowance namely £5,100 can be invested in cash.
The personal allowance for capital gains tax is £10,100 for the tax year 2009-10. So if you can realize a gain in this tax year with in the tax allowance it would be a clever idea.
Then, as I have said above one always needs to review their pension contributions. Tax relief is available at 20% for basic rate taxpayers and at 40% for higher rate tax payers. Also it is possible to invest for non tax payers such as children or grandchildren and also for a spouse.
Lastly some planning for Inheritance Tax can be very useful for the future.
Author Resource:
The Author writes many articles on Income Tax Refunds and Pension Planning and for more information please go to PAYE Refunds
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