Millions of children, pensioners and other people with low incomes are paying about £200m a year tax unnecessarily on savings because fewer than one in 10 banks and building societies tell them they can have interest tax-free.
That is the conclusion of new research by the Low Incomes Tax Reform Group (LITRG), which claims that banks, building societies and HM Revenue and Customs (HMRC) must try harder.
The LITRG was formed by the Chartered Institute of Taxation (CIOT), a registered charity, to “give a voice to the unrepresented”. Its latest research looks like a fine example of helping people who cannot afford an accountant to find their way through the maze of Britain’s complex tax system.
Everyone aged less than 65 – including children – can receive up to £8,105 in the tax year which ends on April 5, 2013, without having to pay any income tax. People aged over 65 but less than 75 can receive up to £10,500 tax-free, while those aged 75 or more have a personal allowance of £10,660.