Taxes
Toniloba Opasanya L6SR
Types of Taxes
A pie chart showing the projected constituents of United Kingdom taxation receipts for the tax year 2008-2009, according to the 2008 Budget.
This is the pie chart showing the projected constituents of the United Kingdom taxation revenue for 2010-2011
Income Tax
Income tax forms the single largest source of revenues collected by the government (followed by national insurance contributions, an additional levy on incomes at around 20%). Each person has an income tax personal allowance, and income up to this amount in each tax year is free of tax for everyone. For 2010-11 the tax allowance for those under 65 is £6,475. This reduces by £1 for every £2 of taxable income above £100,000; whilst this allowance is withdrawn the effective income tax rate is 60% and with the NI rate in this band the effective tax rate is 62%. On 22 June 2010, the Chancellor (George Osborne) increased the personal allowance by £1000 in his emergency budget, bringing it to £7,475 for the tax year 2011-12. For the 2012/13 tax year, tax-free allowance is £8105. Above this amount there are a number of tax bands — each taxed at a different rate (as of 2012/13): Current Tax Rates
Value Added Tax (VAT)
Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the national government. It was introduced in 1973 and is the third largest source of government revenue after income tax and National Insurance. It is administered and collected by HM Revenue and Customs.
VAT is levied on most goods and services provided by registered businesses in the UK and some goods and services imported from outside the European Union. There are complex regulations for goods and services imported from within the EU. The default VAT rate is the standard rate, 20% since 4 January 2011. Some goods and services are subject to VAT at a reduced rate of 5% (such as domestic fuel) or 0% (such as most food and children's clothing). Others are exempt from VAT
Types of Taxes
A pie chart showing the projected constituents of United Kingdom taxation receipts for the tax year 2008-2009, according to the 2008 Budget.
This is the pie chart showing the projected constituents of the United Kingdom taxation revenue for 2010-2011
Income Tax
Income tax forms the single largest source of revenues collected by the government (followed by national insurance contributions, an additional levy on incomes at around 20%). Each person has an income tax personal allowance, and income up to this amount in each tax year is free of tax for everyone. For 2010-11 the tax allowance for those under 65 is £6,475. This reduces by £1 for every £2 of taxable income above £100,000; whilst this allowance is withdrawn the effective income tax rate is 60% and with the NI rate in this band the effective tax rate is 62%. On 22 June 2010, the Chancellor (George Osborne) increased the personal allowance by £1000 in his emergency budget, bringing it to £7,475 for the tax year 2011-12. For the 2012/13 tax year, tax-free allowance is £8105. Above this amount there are a number of tax bands — each taxed at a different rate (as of 2012/13): Current Tax Rates
Value Added Tax (VAT)
Value Added Tax (VAT) is a tax on consumption levied in the United Kingdom by the national government. It was introduced in 1973 and is the third largest source of government revenue after income tax and National Insurance. It is administered and collected by HM Revenue and Customs.
VAT is levied on most goods and services provided by registered businesses in the UK and some goods and services imported from outside the European Union. There are complex regulations for goods and services imported from within the EU. The default VAT rate is the standard rate, 20% since 4 January 2011. Some goods and services are subject to VAT at a reduced rate of 5% (such as domestic fuel) or 0% (such as most food and children's clothing). Others are exempt from VAT