Tax planning increase in private sector
. Because they’ve lost faith in the UK tax system, both inland and expat Brits living abroad are taking accountancy into their own hands, so as to alleviate their fears about tax liability and HMRC. So, what’s caused this slow-building surge in employing financial advisors?Financial experts and many international analysts are seeing higher levels of interest and uptake in international
It’s fair to say that few people enjoy paying taxes or having to surrender a substantial percentage of their income to the taxman. HMRC (HM Revenue & Customs) have now bolstered and justified this common distaste for by unashamedly employing debt collectors to demand outstanding tax demands. Initially, this seems like a logical and plausible move, but there’s a little more to it.
In the 2013/14 tax year, HMRC used a dozen debt recovery companies to recoup over 215,000 outstanding tax bills and to resolve any disputes, but here’s where it gets a little contentious. Each instance was the direct result of a payment mistake made by HMRC that’s left thousands of Brits struggling to afford repayments and to meet HMRC demands.
Although an attempt was made to take the assets of a just a small percentage of those taxpayers, the difference between how affluent investors and average wage-earners with families to feed are being treated, is starting to cause uproar. HMRC overpayments are no fault of the general public and these aggressive recovery measures are now being called into question.
In total, around 5.5m tax bills were calculated inaccurately in the same period and now, too afraid to face the prospect of having to repay unaffordable sums of money to HMRC, many people are refusing to claim benefits to which they’re fully entitled. The average discrepancy is now estimated to be around £300, so what’s being done about it?
After spending £270m on the Real Time Information (RTI) programme, which was introduced in 2013 to ensure greater PAYE (Pay As You Earn) accuracy, it’s unlikely that HMRC will take any drastic steps in resolving their issues anytime soon. The discrepancy has since grown and evidently, the scheme has failed to deliver satisfactory results and finance professionals are now dealing with the fallout.
Taxpayers can minimise their monthly tax burden and optimise their money’s overall performance by speaking with an independent financial advisor. Amongst others, options surrounding offshore investment, asset management and private pension planning can help generate spare cash and safeguard your estate from inheritance tax and other such posthumous pitfalls that families can expect to face.
By David Robinson
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