With the tax return deadline looming fast the Chancellor of the Exchequer is set to make an estimated £442million from late payments, miscalculations and surcharges on unpaid tax.
Last year over one million forms were submitted late, after 31 January, but the immediate £100 late payment charges are only the tip of the fine iceberg for taxpayers.
“The sums to be lost could lead to businesses folding so while there’s time I urge people to make every effort to get their tax returns in,” said Robert MacDonald, a leading financial adviser with MacDonald & Co.
A recent TaxAction 2010 report, undertaken by RAKM, based on a specially commissioned analysis of Her Majesties Revenue and Customs (HMRC) and a range of other official data sources reveals that money will be wasted in three ways.
Around £116million in penalties due to forms being received after the 31 January filing deadline. Miscalculations are estimated to rack up a further £310million in charges, while £16million is set to be clawed in by the Exchequer in unpaid tax.
HMRC has the power to charge up to £60 a day for forms which are returned after the deadline.
“Higher rate tax payers should ensure they have claimed their pension contributions back against tax because you can claim back a further 20% of the amount you have paid already,” said Mr MacDonald.
“The other thing is to make sure that you’ve claimed for all your expenses including things you might miss like wear and tear on your car and the maintenance of your property.”
The best way to make savings on your tax is to use Enterprise Investment Schemes or Venture Capital Trusts but they come with a wealth warning.
“The reason you get such great tax relief on it is because the government still rewards investors in small start up companies.” said Mr MacDonald.
“They are high risk investments and therefore not suitable for all but these companies are the backbone of the country and the tax savings can be substantial.”
For more information please visit www.macdonaldandco.com or call Peppercorn PR on 0845 217 8757