Average Briton pays 149 days salary in tax

UK workers are paying £12.6bn in unnecessary tax each year, losing nearly five months' salary to the taxman.

The figures from unbiased.co.uk detail how Britons waste £421 each on unnecessary tax payments by being tax inefficient. The biggest area of tax wastage is tax credits, with £7.26bn child tax credits remaining unclaimed every year.

Failure to utilise tax relief on pension contributions is the second biggest area of tax wastage equating to more than £2.45bn, followed by failure to make charitable donations tax efficient at more £997m.

Only a sixth of taxpayers have made their tax bill more efficient in the last year, despite half those questioned admitting they knew they could reduce their tax bill.

Karen Barrett, chief executive of unbiased.co.uk highlighted the fact that last week marked the first time workers would be "tax free" since the start of the year.

"Although it’s nice to be able to think that you have stopped paying the taxman and started paying yourself, five months is still a significant amount of the year and our research reveals the top areas where we could be drastically reducing the amount we waste through unnecessary or unclaimed tax," she said.

"Those looking to tackle their tax properly and ensure the right structures are set in place for their future should speak to an independent financial adviser who can offer guidance, advice and, more importantly, help you take action."

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