The market for tax shelters is exploding. HMRC are projecting that the number of higher rate taxpayers will increase by some 630,000 in the current tax year compared to 2010/11. At least 3.74 million people will be paying 40% tax this year according to the Revenue which amounts to more than 12% of the taxpaying population – and that’s the highest proportion for over 20 years.
Then there is also that elite population of people who are paying the 50% income tax rate. HMRC reckons that this group will number 308,000 in the 2011/12 tax year. That is only about 1% of the taxpaying population, but they are expected to pay a total of over 28% of the total national income tax bill. The additional rate is expected to raise £31 billion, and 80% of it is accounted for by earnings. The extra 10% tax looks as if it will generate some £6 billion.
When you also take into account the increased rates of National Insurance and VAT that UK taxpayers are now suffering it’s never been more important to avoid tax on your savings and investments. Create Wealth Management advise clients on the various tax-free shelters that are available, which investment funds to invest in and which investment providers to use. If you are interested in looking at tax-free investments please contact our client services team to arrange an appointment with one of our financial planners. Create Wealth Management provides whole of market independent financial advice (IFA) in Bristol – Westbury on Trym and Clifton, Cardiff and Newport.
Peter Davies, Director, Create Wealth Management