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Analysis of Different Taxation Systems

Added on - 12 Nov 2020

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Taxation
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1. Analysis of taxation systems and taxation legislation along with thier implications fornational taxation:..........................................................................................................................3M1. Critical analyse and comparison of taxation systems:..........................................................4TASK 2............................................................................................................................................5P2. Implications of taxation liabilities for unincorporated organisations:...................................5M2. Application of models and formulae to calculate and determine taxation liabilities forunincorporated organisations:......................................................................................................6TASK 3............................................................................................................................................6P3. Explore and explain taxation liabilities for both private and public companies:..................6Incorporated organisation............................................................................................................6M3. Application of recognised models and formulae to interpret data and determine taxationliabilities, including late payment interest penalties, for incorporated organisations:.................8TASK 4............................................................................................................................................9P4. Evaluate the impact of key legal and ethical constraints on different organisations:............9M4. Critical evaluation of impacts of key legal and ethical constraints on application todifferent organisations:..............................................................................................................10CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONIn UK, government collects various taxes at three level: Central government, devolvedgovernment and local government. Income tax holds first rank in source of revenue ofgovernment and, second and third rank is occupied by national insurance contributions and valueadded tax (VAT). Taxation is the amount which is paid by the direct and indirect users ofproducts and services (Akcigit, Baslandze and Stantcheva, 2016). To understand the concept oftaxationFord Motor PLC has been taken that is multinational company and dealing in automobiles.It helps to develop and growth of the country. It this report various topics has beendiscussed such as taxation system and legislation, comparison of tax system in different country,implication of tax liability in unincorporated and incorporated organisation, tax liability forprivate and public company and legal and ethical restraint associated with taxationresponsibilities.TASK 1P1. Analysis of taxation systems and taxation legislation along with thier implications fornational taxation:Tax system and its types:Tax is a compulsory contribution to state revenue, imposed by the government on public's profits and income. It also includes cost of some goods, services and transactions. Thisincludes two types of system such as direct and indirect tax. Direct tax means tax amountdirectly paid to government. It is imposed by the government on individual and organisation likeas income tax, wealth tax, corporation tax etc. Where as indirect tax are collected frommanufacture and sale of goods and services such as value added tax, sales tax, goods andservices tax. It is collected by mediator from customer who bear the direct burden of tax.Following are the major direct or indirect taxes as discussed below in the context of Ford:Direct TaxesIncome tax: It charge on income of individual and paid by same person according to income taxdepartment.Wealth tax: It charged on the value of assets like property and mines that a individual holds.Gift tax: An individual pay gift tax to government and receive gifts after paying tax amount.
Fringe benefits: It is collected by the state government and paid by employer who providesfringe benefits to employees.Indirect TaxesExcise duty: Its payable by producer who shifts tax burden to wholesaler and retailer.Custom duty: This is imposed on goods which is purchased from outside country and paid byretailer and consumers (Auerbach and Hassett, 2015).Sales tax: This tax is paid by retailer or shopkeeper, ultimately paid by customers by imposingsale tax on goods and services.Service tax: It is also paid by the consumers who uses the services, such as cash bill inMcDonald.It has been evaluated that tax system is a contribution amount which is imposed by thegovernment and paid by customer who uses the goods and services. This is a compulsorylegislation which is followed by the public.Tax legislation in UK that impacts national income:In UK, tax legislation are imposed by the government which is based on marginal taxrates. In other words, it involve payments to central, local and developed governments that has tobe paid by customers. It helps in development of country and make it independent. In FordMotor PLC, manager should follow taxation policy that will help to develop country, increasethe reputation of company and accumulate funds for running government machineries. It alsoaffect Uber business by increasing cost such as rise in corporation tax and custom duty thatincrease the cost of company. Tax system impact on nation in order to increase the growth ofnational income by investment and consumption.M1. Critical analyse and comparison of taxation systems:Analysis of the taxation system of United States of America:Taxation system which is used in the United States of America is been set up the Federaland State level. There are many types of taxes prevailing in the United States of America such asIncome tax, Sales tax, Capital gains, etc. The taxes in United States of America is relatively lowin tax collection as compared to other developed countries. The taxation system prevailing in theUSA is more complex to the taxation system in UK. The taxation system of UK consists of threestages whereas the taxation system in US has only two stage the federal and the states, and the
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