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Application of Knowledge Regarding Tax
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Added on 2019-09-25
Application of Knowledge Regarding Tax
Added on 2019-09-25
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1TAXATIONASSESSMENT 1Table of ContentsINTRODUCTION.......................................................................................................1ABOUT THE COMPANY...........................................................................................1TAX RULE CHANGE................................................................................................2ANALYSIS.................................................................................................................3ACTION PLAN...........................................................................................................5ETHICAL ISSUES.....................................................................................................6CONCLUSION...........................................................................................................6REFERENCES..........................................................................................................6INTRODUCTIONThe assignment is about the application of knowledge regarding tax to a practicalsituation. It requires us to assume our role, choose a company on which we are
2working, the explanation of the profile of the company and the current state of thecompany on which we are working. It is not necessary to take the actual figuresabout the company but we can assume the figures to explain an illustration.Moreover, the assignment requires us to show and explain how the changes madewould affect the company chosen. Another part requires us to analyse the situationwith the help of illustrations. It requires us to draft an action plan for the future of thecompany that would benefit the company overall. The consideration of professionalethics to the action plan needs to be outlined. Finally, the report requires us tooutline the strength and weaknesses of the report or any additional information thatwe could include in the report to make it more useful and to complete the analysissuccessfully.To execute the assignment, the role assumed here is the role tax consultant. Thecompany chosen to work upon is The Unilever. The profile and background of thecompany is detailed below.ABOUT THE COMPANYThe company chosen by me here is Unilever. Unilever is the largest and strongestcompany of the United Kingdom. The company operates in a consumer goodsindustry. The company was founded 86 years ago. The headquarters of thecompany is also in United Kingdom. Unilever offers products such as foods,beverages, cleaning agents and personal care products. The company owns overmore than 400 brands and its operations are carried out worldwide. Some of the topbrands of the company are WALL’S, Dove, Vaseline, Cornetto, POND’S,TRESemme. Unilever started in 1885. Firstly, Williams and James Lever launched a laundry soapwhich was world’s first branded laundry soap. Unilever has sites of manufacturingand distribution depots at UK. Unilever’s sale in UK is around 2 billion Euros everyyear. (ANON, N.D.)TAX RULE CHANGEThe important part of the article is about the tax avoidance. Tax avoidance is legal.Tax avoidance is making use of the tax laws and reducing the tax liability. Taxavoidance is simply avoiding tax legally. Most of the organisations make use of taxavoidance to reduce their tax liability legally. But, there are many regulations issuedwhich relate to the concept of tax avoidance. Although tax avoidance is consideredlegal, but there are some tax-laws that need to considered while planning about thetax avoidance. Moreover, the article given considers the document that is created by members ofthe tax profession for their members that is the Professional Conduct in Relation toTaxation. The document is divided into three parts. First part of PCRT is thefundamental principles that are integrity, objectivity, professional competence anddue care, confidentiality and professional behaviour that should be followed by the
3tax consultants. The second part of PCRT is about tax returns and tax advice. Thethird part of the PCRT is detailed guidance to deal with some specific circumstanceslisted. (Mandy Pearson, Sharon Baynham, October. 2015.)The change in tax rule affects each and every organisation of the country to whichthe regulations apply. The article discusses about the debate over tax avoidance. Itstates that there have been imposed new regulations on the tax advice by taxconsultants. Some of the examples given in the article about the new regulations areGAAR (General Anti-Abuse Rule), disclosure of tax avoidance schemes and thepromoters of tax avoidance schemes regime. The aim of including the above discussed regulations on to business is to keep acheck on what the taxpayers’ do. Another objective is to assure that the profession oftax consultants do not bring any reputational damage to themselves as an individualor to the client or to the profession as a whole. Another important point discussed in the article is about the fundamental principlesthat the tax consultant should undertake while advising his client. Tax consultantsplay a great role in an organisation. They have to keep themselves updated witheach and every change in the tax laws in order to help their client in the bestpossible way. The important and main new regulation is GAAR. Another important and wideningscope of new regulation is disclosing tax avoidance schemes and the promoters oftax avoidance schemes. The latest addition of the PCRT is published in May 2015.The new regulations related to tax avoidance are on ongoing development. Thedocument mainly focuses on the changes made in the taxation laws and how taxconsultants should tackle different situations. One small change in the tax rule may affect the industries or organisations widelybecause if that change relates to the operations of the organisation, the organisationwould have to consider it and they will have to include that change in their taxplanning. Tax consultants have to consider the change in tax rule efficiently. Forexample, there are regulations related to General Anti Abuse Rule. The document is importantly issued in order to prevent the risk of tax avoidance. Ithas been issued to build up the strategy introduced by the HMRC regarding anti-avoidance strategy. It will also help the HMRC to deal with abusive tax avoidance.The GAAR regulations discussed are important for the company chosen to in casethey apply to the organisation. Let’s discuss about the taxes to which GAAR apply. 1.Income Tax2.Corporation Tax3.Capital Gains Tax4.Inheritance Tax5.Petroleum Revenue Tax
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