Taxes

Only available on StudyMode
  • Topic: Tax, Taxation in the United Kingdom, Taxation
  • Pages : 5 (1861 words )
  • Download(s) : 69
  • Published : December 6, 2012
Open Document
Text Preview
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 This reduces by £1 for every £2 of taxable income above £100,000; whilst this allowance is withdrawn the effective income tax rate is 60% and with the NI rate in this band the effective tax rate is 62%.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 or outside the system altogether. 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.

Aggregate Levy
Aggregates Levy is a tax on the commercial exploitation in the UK of rock, sand and gravel. There is one basic rate of £2.00 per tonne. You will pay less on smaller amounts. For example, you would pay £1.00 on half a tonne. You will need to register for the levy if you are responsible for exploiting aggregate in the UK for commercial reasons. Unlike VAT for example, there is no registration threshold. Council Tax

Council Tax is the system of local taxation used in England, Scotland and Wales to part fund the services provided by local government in each country. (In Northern Ireland, the form of local taxation is rates.) It was introduced in 1993 by the Local Government Finance Act 1992, as a successor to the unpopular Community Charge. The basis for the tax is residential property, with discounts for single people. As of 2011, the average annual levy on a property in England was £1,196. Inheritance Tax

In the United Kingdom, Inheritance Tax is a transfer tax. It was introduced with effect from 18 March 1986 replacing Capital Transfer Tax. From 1796, small inheritance taxes, then called legacy, succession and estate duties were collected, in England and Wales on estates over a certain value by stamping deeds and by stamping wills admitted to probate, similarly to stamp duty. The value varied and the scope of estate duty became gradually extended as the socio-economic parish level land taxation system obsolesced as a result of the Industrial Revolution, see the poor rate and Old Poor Law. From 1857, estates worth over £20 were taxable but duty was rarely collected on estates valued under £1,500. Death duties were introduced in 1894 and the rates have been increased which led in many cases for the first time to the breaking up of large estates. Estate Duty...
tracking img