Uk Tax System
Introduction
Tax in simple terms refers to the government raising money to spend on public services which includes health and social security system and education. Tax levied on a number of goods and services in the form of Value Added Tax (VAT), such as income tax on the money we earn. Tax can also be imposed on various transactions i.e. inheritance and profits from selling homes or antiques. The tax system is a complicated procedure.
The purpose of task A is to provide features of the UK tax system in conjunction with any rules and regulations with regards to UK registered companies. It will also discuss the process in which the tax liability of an individual is implemented. The principle UK taxes will be explained clarifying the fundamental aspects of tax law. Task B analysis the UK tax system by contrasting it with USA‘s tax system to identify how a company is affected and operated within different tax structures.
The UK tax system is constituted of various different taxes, they are categorised as direct taxes or indirect taxes. Direct taxes are charged on profits, income and other acquisitions. Direct taxes mainly consist of Corporation Tax, Capital Gains Tax, Income Tax and Inheritance Tax. Another form of direct tax is National insurance contributions. These taxes are all controlled by Her Majesty’s Revenue and Customs (HMRC). National insurance contributions, however, are administered by the National insurance Contributions Office (NICO) of HMRC. The major tax payable by companies is corporation tax.
Indirect taxes are taxes on expenditure. The charge is incurred when a tax payer purchases a product and is paid to the merchant as part of buying the product. It is then the merchant’s responsibility to process the tax on to the tax authorities. Indirect taxes include VAT, Custom duties, Excise duties (alcohol, tobacco and petrol) and Stamp duties. VAT is now also
Tax in simple terms refers to the government raising money to spend on public services which includes health and social security system and education. Tax levied on a number of goods and services in the form of Value Added Tax (VAT), such as income tax on the money we earn. Tax can also be imposed on various transactions i.e. inheritance and profits from selling homes or antiques. The tax system is a complicated procedure.
The purpose of task A is to provide features of the UK tax system in conjunction with any rules and regulations with regards to UK registered companies. It will also discuss the process in which the tax liability of an individual is implemented. The principle UK taxes will be explained clarifying the fundamental aspects of tax law. Task B analysis the UK tax system by contrasting it with USA‘s tax system to identify how a company is affected and operated within different tax structures.
The UK tax system is constituted of various different taxes, they are categorised as direct taxes or indirect taxes. Direct taxes are charged on profits, income and other acquisitions. Direct taxes mainly consist of Corporation Tax, Capital Gains Tax, Income Tax and Inheritance Tax. Another form of direct tax is National insurance contributions. These taxes are all controlled by Her Majesty’s Revenue and Customs (HMRC). National insurance contributions, however, are administered by the National insurance Contributions Office (NICO) of HMRC. The major tax payable by companies is corporation tax.
Indirect taxes are taxes on expenditure. The charge is incurred when a tax payer purchases a product and is paid to the merchant as part of buying the product. It is then the merchant’s responsibility to process the tax on to the tax authorities. Indirect taxes include VAT, Custom duties, Excise duties (alcohol, tobacco and petrol) and Stamp duties. VAT is now also
Bibliography: http://www.ifs.org.uk/fs/articles/fsgale.pdf www.hmrc.co.uk http://www.taxrates.cc/html/us-tax-rates.html