£9bn of tax to be ‘overpaid’ by Britons this year

A “colossal” £9bn of tax will be overpaid by Britons this year as people fail to take steps to the amount they pay, according to new research.

A study by Unbiased.co.uk found that people will waste:

£3.94bn in unclaimed tax credits;

£1.97bn through avoidable inheritance tax;

£742m lost through not saving money into a pension;

£516m in avoidable capital gains tax;

£442m from late or incorrectly submitted self-assessment tax returns;

£328m from failing to make use of personal allowances;

£36m in avoidable tax on savings interest.

On average every tax payer in the UK will pay £186 more than they need to, with 86% of people doing nothing to reduce their tax burden. Despite this, it is estimated that wastage has dropped 9% from the previous year.

“Whilst it is encouraging to see our annual tax wastage is set to go down by 9% this year, £9 billion is still a colossal amount to be lost through error and avoidable circumstances,” said Karen Barrett, chief executive of Unbiased.co.uk.