Business Taxation: Trading Profits, Employment vs Self Employment, VAT Schemes

BUSINESS TAXATION

Table of Contents
INTRODUCTION...........................................................................................................................3
QUESTION 1...................................................................................................................................3
Linda's trading profits for the year 31st march 2021..............................................................3
QUESTION 2...................................................................................................................................4
Criteria which can be used to distinguish employment from self employment. Why people
prefer self employment?.........................................................................................................4
Why prefer self employment rather than being employed, resulting in so many IR 35 cases5
QUESTION 3...................................................................................................................................5
Discussion of Six badges for trade.........................................................................................5
Different VAT schemes for various VAT registered companies...........................................7
QUESTION 4...................................................................................................................................8
Inheritance tax arising when the death...................................................................................8
Capital gain tax liability.........................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business taxation is defined as the taxes that businesses as a basic component of their
business operations must pay. Whether there is a sole businessman, mate, component of limited
liability firm or a corporation etc. every type of enterprise will have to follow tax regulations.
Each type of entity will face different type of tax consequences(Blakeley, 2018). The study
assessment describes the various aspects of business taxation. The report focuses on facets such
as practical sum on trading profits assessments, key 6 badges of trade, multiple VAT schemes in
context of registered VAT businesses etc. It also covers capital gain tax needs as well as practical
addition of inheritance tax.
QUESTION 1
Linda's trading profits for the year 31st march 2021
Linda's trading profit (before deduction of capital allowances) for year ended 31 Mar 2021

QUESTION 2
Criteria which can be used to distinguish employment from self employment. Why people prefer
self employment?
Employment refers as a bond between two parties basically based on written agreement
where work is paid for, here one party whether it is a corporation, profitable or non profitable
organisation or other type of entity act as employer and another party is employee. For salaries
employees work which can be either in form of hourly wages or annual salary totally depends on
type of work allotted to employee or their sector of working. In some fields employees receives
tips, bonuses etc. or in some fields they get benefits like health insurances, Disability and
housing insurances, or gym memberships etc. Employment is strictly governed under
employment laws or organisation contracts. Both employee and employer can cancel the contract
also (England, 2017). Employment contract with employees may need written correspondences,
letter of confirmation as well as verbal confrontation. The UK describes employment in terms of
'service contract'. This contract empowers employers as where they can appoint employees and
how they can get done their works.
Employment allows employees to decide or control various aspects of their job like
working place, infrastructure, hours, salaries and duty. Employer controls the feedback of
employee as well as trust on them. In private sector when employee have some issues with
employer then they have a wide range of options either they can take their problem to supervisor,
speak to senior authorities, go to HR etc. Employers are not permitted to discriminate on basis of
sex, colour, age, religion, nationality, personal liking, sexual liking, political positioning or
disabilities (Fritsch and Wyrwich, 2017). As employees possess the right to file a complaint on
the basis of discrimination they have faced to relevant authorities which obligates correct
regulations of employment. In UK employment contracts are classified by government into
different categories such as fixed time contract (it lasts for definite period of time), part time or
full time contract( it has no specific period of time), agency staffs, freelancers, contractors,
consultants and zero hour contracts.
The term self employment refers to 'setting up and operating a profitable company or
social welfare organisation'. A lot of successful firms were started when males and females
invented something innovative, set up their business and certified a trademark. In success of a
business an important role is played by outstanding business concept in market place while its