Most people unaware of advantages in the new tax regime
Eight out of 10 Britons are unaware of tax changes that will come into force at the beginning of April, according to a new survey.
The start of the new tax year on April 5 will see a rise in the personal allowance to £7,475 for people aged under 65 who earn less than £100,000, while there are also increases in personal allowances for people over 65.
The amount people can save tax-free into an ISA is set to go up, but the threshold at which the 40% tax rate kicks in will be reduced from £37,400 to £35,000.
However, research carried out by HSBC found that most people did not know about the changes.
Awareness was particularly low among people on lower incomes, the group that the personal allowance benefits the most.
Nearly three-quarters of people did not know that the current tax-free personal allowance for people aged under 65 is £6,475, and 84% were unaware that the amount they can earn before they have to pay income tax is set to jump to £7,475 from the start for the new tax year.
Around 79% of people earning less than £5,000 a year and 70% earning less than £10,000 a year did not know about this tax break, suggesting significant numbers of people may be paying income tax unnecessarily.
Eight out of 10 people did not know that those aged over 65 had higher personal allowances and 91% did not realise that there was a special band for people aged over 75, while nine out of 10 people did not realise that these allowances were set to rise in April.
At the same time, 65% of people did not know that they could currently save up to £5,100 a year tax-free into a cash ISA, while 82% were unaware that the sum was set to increase to £5,340 in April.
Around 47% of people also thought that they had to pay tax on all of the interest that they received on their savings, without realising that this was not the case for people who had an income below the annual personal allowance.
A further 85% of people had not heard of an R85 form, the form people must fill in if they do not pay tax on savings interest.