IFA advises people to ‘pay’ heed to taxes |
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Wed, 23 Mar 2005 01:00
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A survey by IFA promotion, the independent financial advice promoter revealed that in spite of the chancellor’s decision to secure ISA limits last week, as much as 2.1 million people, that is almost nine out of ten taxpayers in Wales were going to pay the taxman an extra £252m this year.
It was becoming clear that people were critically failing to handle their tax affairs competently, what with over two thirds (70%) of the population in Wales allowing their tax burden to rise over the last year. While 87% of these people regretted the rise, about 81% confessed that they had simply done nothing to regulate the amount of tax to be paid. When asked what taxes they resented the most, they were quick to retort- petrol duty, TV licence fees and income tax.
However, the average individual tax waste in the region was £120 per taxpayer, and for many higher rate taxpayers, the waste was only higher.
| IFA advised these people to be more alert and cautious in their tax payments and to make good and intelligent use of saving tools like an ISA plan. That would greatly assist people to overcome their surplus outflow in taxes. In fact, IFA has also launched a website www.taketaxaction.co.uk, educating people about tax saving methods.
With Chancellor Brown reprieving investors in his pre-election budget regarding Section 48 film tax breaks till October 2007, investors in British films will be able to obtain immediate tax relief at 40% if they are higher rate taxpayers. So, with an investment of £100,000, £40,000 from your tax bill for that year will be slashed by Inland Revenue.
Section 48 accepts two types of schemes for tax relief: sale and leaseback plans and production partnerships. Sale and Leaseback plans have been found to be more popular as investors can easily pool their cash to buy two or more films and then lease them back to the production company without any fear of the success of the film. Generally, investors contribute only 20% and borrow the remaining amount. The loan is then repaid with the rent from the production company over the next 15 years. Conversely, production partnerships involve more risk as they depend on how the film fares and in case of unfortunate failure, the investor loses all his money.
Films that have fared well in this scheme are ‘The Full Monty’ and ‘Billy Elliott’, however it is not a feasible option for people paying higher taxes.
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