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Do you know exactly how much you can earn before you have to pay tax?

If the answer is “no”, you are definitely not alone. According to a recent Which? survey, nearly half of those surveyed did not know the Personal Allowance threshold.

Which? asked 4,572 people to take their ‘Great British Tax Quiz’ and analysed their results. They discovered that only around half of those surveyed know how much they can earn before they have to pay tax on that income. The results also show that only two thirds of the respondents know the rules around ISAs.

What is in the Tax Quiz?

The Great British Tax Quiz has 10 true or false questions about common areas of UK tax. They include issues of tax return fines, renting property and charitable donations. We’re not going to give away the actual questions, in case you want to have a go yourself. It is completely anonymous, only takes a couple of minutes and highlights areas of the tax system that you may need to brush up on. As long as you don’t cheat and Google the answers as you go.

Why we are interested in Which?’s survey results

Tax Banana exists in order to provide free, accessible information about the UK tax system. The results of this survey demonstrate that there really is a need for this service. Of course, HMRC provide a mass of information on GOV.UK. It is written with a little jargon as possible, but that doesn’t make the actual tax system any less complex. We translate the technical side into plain English and make any connections between different tax rules very explicit.

Why should I find out about the tax system?

Our tax regulations are part of every stage of our lives and you are at a disadvantage if you don’t understand the sections that apply to you. It all boils down to the fact that you could end up paying too much tax that you need to reclaim. Or, worst case scenario, you discover that you have not paid enough tax and owe HMRC. The regulations are long and detailed because they need to cover all possible taxpayer scenarios.

For example:

HMRC’s rules include guidance for all potential financial situations. But it often takes a tax expert or accountant to find the best path for an individual. We believe that all taxpayers are entitled to enough understandable information that they know when they need to seek help from HMRC or a professional. ‘Not knowing’ is not one of HMRC’s acceptable reasons for not fulfilling your tax liability.

We welcome the publication of Which?’ Great British Tax Quiz because it is an unthreatening way to find out which areas of tax you are less aware of.

January 19th, 2019|Tax News|

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