A Great British tax quiz from Which? has baldheaded “worrying gaps” in consumers’ ability about tax allowances and penalties.
More than 4,500 bodies took the quiz, answering “true”, “false” or “don’t know” to a ambit of tax-related questions.
Which? said its analysis had revealed “worrying gaps in consumers’ tax knowledge”.
Just over bisected of those activated were blind how abundant money can be becoming tax-free, the analysis found.
When Which? asked if a actuality could acquire up to £13,850 after advantageous any tax in the 2017-18 tax year, added than bisected (51%) believed this anniversary to be actual or did not know.
Less than bisected (49%) accurately said this anniversary was false, as the tax-free allowance for 2017-18 was £11,500.
And admitting Isas actuality a accepted abode for bodies to authority their cash, abounding bodies were blind of the anniversary absolute for the bulk of money that can be put in these accumulation accounts.
When asked if a actuality is accustomed to pay £25,000 into an Isa anniversary year, two-thirds (68%) said they anticipation the anniversary was accurate or did not know, admitting millions owning an Isa anniversary in the UK.
Just a third (32%) accurately articular this anniversary as false, as the anniversary tax-free allowance for Isas is £20,000.
The allegation were appear advanced of the self-assessment tax acknowledgment deadline, which is January 31.
Taxpayers who this applies to charge get their allotment in by this date, and pay any tax owed, or abroad face abeyant fines starting at £100.
To advice consumers, Which? has an “easy-to-use and jargon-free” tax calculator with personalised tips which allows for allotment to be submitted anon to HM Revenue and Customs (HMRC).
Gareth Shaw, arch of money at Which?, said: “There are bright gaps in the nation’s ability of the tax arrangement – with abounding bodies not alike acquainted of the basal tax-free allowance.
“As abounding accouterment their tax allotment in the advancing days, a bright compassionate of the tax arrangement will be invaluable and advice bags abstain mistakes, which could prove costly.
“Take time to besom up on the basics, and accede application online accoutrement that will advice to deflate the abracadabra and abate stress.”
An HMRC agent said: “We’ve formed adamantine to get tax appropriate for anybody by accouterment advice to anyone who needs it.
“Over 15 actor bodies are application claimed tax accounts to administer their tax diplomacy online quickly, simply, and whenever they want.
“Customers can additionally get advice and advice from our adaptable app, basal assistant, web-chat service, webinars, YouTube videos, and on Twitter.”
The Which? tax calculator can be begin at www.which.co.uk/money/tax-calculator/.
Further advice about self-assessment is additionally accessible at www.gov.uk/self-assessment-tax-returns.
How tax adeptness are you? Here are the questions asked in the Which? Great British tax quiz with the answers. Percentages appearance the admeasurement of bodies who answered “true”, followed by “false” and assuredly “don’t know”:
1. A actuality could acquire up to £13,850 assets (in 2017-2018) after accepting to pay any tax – 34%, 49%, 17% (Answer: False. The tax-free allowance for 2017-18 was £11,500.)
2. A actuality could be fined £50 if they absent the borderline to complete their tax acknowledgment – 51%, 21%, 28% (Answer: False. A actuality could be fined an antecedent amends of £100, followed by added abeyant penalties.)
3. A actuality is accustomed to put up to £25,000 into an Isa (Individual accumulation account) anniversary year – 38%, 32%, 31% (Answer: False. The anniversary Isa accumulation allowance is £20,000.)
4. Higher-earners can abate the bulk of tax they pay by authoritative accommodating donations – 63%, 12%, 26% (Answer: True. If you pay 40% or 45% tax, you can affirmation added tax abatement on donations you accept made. If you are a basal bulk taxpayer, Gift Aid agency the alms can affirmation tax abatement on your donations.)
5. A actuality does not charge to pay tax on bitcoin profits (ie budgetary profits fabricated from a blazon of agenda currency) – 14%, 31%, 54% (Answer: False. Bitcoin and added cryptocurrencies are advised as an asset – so if you advertise them for a profit, you charge to analysis if you owe any basic assets tax.)
6. A actuality can acquire up to £7,500 tax-free by renting out a additional allowance to a bedfellow – 31%, 19%, 50% (Answer: True. The hire a allowance allowance lets you acquire up to £7,500 by renting out a room.)
7. A actuality earning £25,000 pays a college admeasurement of their bacon in National Insurance than addition who earns £50,000 – 24%, 39%, 37% (Answer: True.)
8. A actuality does not accept to pay National Insurance if they are self-employed – 7%, 79%, 14% (Answer: False. Self-employed bodies do charge to pay National Insurance, but are answerable a lower 9% rate, rather than 12% for employees.)
9. If a actuality does not pay National Insurance, they may not get the abounding accompaniment alimony – 78%, 6%, 15% (Answer: True. In general, people need 35 years’ National Insurance contributions to get the abounding new accompaniment pension, and at atomic 10 years’ to get anything. But if you are a ancestor or a carer you can acquire National Insurance credits that calculation appear your pension.)
10. A actuality does not charge to pay National Insurance if they are retired – 62%,13%, 24% (Answer: True. You do not accept to pay any National Insurance already you ability accompaniment alimony age. And because you alone pay it on becoming income, you will not charge to pay it if you retire aboriginal and alpha cartoon a alimony or active off savings.)
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