One in three UK voters swayed by tax policies
Tax policies will influence the voting decisions of 35% of Britons, with income tax topping the list of concerns.
According to a report produced by unbiased.co.uk and Prudential, tax is one of the most prominent issues worrying UK voters ahead of the general election in May. Income tax is of the most concern, with 45% of those surveyed ranking it as a top priority.
Those living in the capital are most concerned about tax: 47% of Londoners cite tax policies as important to them. In comparison, just 27% of voters in the South West - where the average wage is £10,000 below that in London - rank tax as their highest priority.
Despite tax ranking as an important voting issue, in January unbiased.co.uk reported that Britons are failing to take sufficient steps to reduce their tax liabilities by using the available tax breaks and allowances. Prudential and unbiased.co.uk claim that the UK is set to waste an unnecessary £4.9 billion in tax this year.
Karen Barrett, chief executive of unbiased.co.uk, comments: "We have been tracking the nation's attitudes to tax as part of our TaxAction research for years now, so it's encouraging to see that so many people have tax policies on their radar.
"We know that paying tax isn't something people enjoy, yet more than half of UK adults admit that they haven't done anything in the past year to reduce their tax liabilities. Clearly we still have some way to go before the nation is truly tax active."
The report coincides with another from fund platform Hargreaves Lansdown, which shows that each of the last five UK governments has raised taxes by more than £5 billion within a year of being elected. As such, the firm is encouraging UK savers to make the most of their tax allowances before May's election.
Tom McPhail, head of pensions research at Hargreaves Lansdown, says: "We don't know who's going to be in charge after the next election, but with the country currently spending more than it takes in, we do know they're going to have to make some tough choices.
"Tax shelters and allowances are likely to come under pressure, so prudent savers will look to make the most of their tax breaks. It makes sense to use as many of your allowances as you can before the Easter weekend so that they fall in the current tax year."
This article was written for our sister website Money Observer
The tax levied on the total value of your estate after you die. IHT has to be paid by the beneficiaries of your estate before they can receive any of the money from it. The money can’t be taken from the value of the estate _– it has to be paid before any money can be released. There is an IHT threshold – known as the “nil-rate band” – below which no tax is levied (£325,000 in 2011/12). Any amount above the nil-rate band is subject to tax at 40%. If your estate totals £600,000, there is no tax on the first £325,000; however your estate will pay 40% tax on the remaining £275,000, a total of £110,000. Prudent tax planning can reduce your IHT liability, so always consult a specialist solicitor.
Capital gains tax
If you buy an asset – shares, a second home, arts and antiques – and then sell it at a later date and make a profit, that profit could be subject to CGT. You don’t pay CGT on selling your main home (which is why MPs “flipped” theirs so regularly) or any securities sheltered in an ISA. Individuals get an annual CGT allowance (£10,600 in 2010/2011) but if you have substantial assets it’s worth paying an accountant to sort it for you.