Report on UK Taxation

Added on - 02 Feb 2020

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UK TAXATION
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31. Define and explain giving example the meaning of trade, profession and vocation...............3Question 2........................................................................................................................................5(a)Reasons for development of bedges of trade..........................................................................5(b&c)Identify 5 badges of trade...................................................................................................6TASK 3............................................................................................................................................8(a)Identify all sources of UK law................................................................................................8b) Explain how the laws are made and who implements them....................................................8c) Give examples of all the laws................................................................................................10CONCLUSUION...........................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONTaxation is one of the field to which business firms give due importance. In the currentreport three areas are covered namely trade, profession and vacation. The difference betweenthese three in terms of characteristics and tax is clearly discussed in the present research study. Inthe middle part of the report, bedges of trade are identified and explained and by using casessame are explained in the report. In the middle part of the research study, all sources of UK laware explained and different rate of tax that is charged on the income is explained in detail. At endof the report, the way in which law is prepared and implemented is explained. Along with this, inthe report examples of these laws are also given in the report.TASK 11. Define and explain giving example the meaning of trade, profession and vocationTrade:Trade refers to the activity under which simple goods are purchased or sold in themarket at specific price. On the profit that is earned by the trader tax is charged. Usually,traders trade in number of products and earn huge amount of revenue in the business(Adam, Browne and Heady, 2010). It can be said that traders are operating at large scale.Profession:In case of profession one provide specific type of service to the people andbusiness firms. It can be said that it is the services of the professionals which satisfyneeds of the business firms.Vocation:Vocation refers to the different domain in respect to which one develop itsown skills. It can be said that unlike profession in vocation one focused on multiple areasin terms of specialization. Tax is charged on traders, professionals and vocational traineesat the specific interest rate.BasisTradeProfessionVocationScopeScope of trade is widebecause same can bedone in any sort ofgoods in any numberby an individual.There is no specificboundary up to whichScope of profession isnarrow. As one dopractice in the specificsort of activitywhether it is related todoctor or any otherprofession. One whoIn case of vocationscope of area is bigbut less than trade.This is because in thevocation one havemultiple skills but incase profession one
one can trade in anycommodity or typesof product. Thisreflects that scope ofthe trade is wide (Kimand et.al., 2013).is professional infinancedomaincannot practice inmarketing. Thus, oneremain confined tofinancerelatedactivities. It can besaid that professionscope is not so big.have skills in thespecific field. Thus,on this basis it can besaid that scope ofvocation is higherthan profession andtrade.Skill developmentIn the trade specificskill development isnot required. Onesimply need to takeexperienceandaccordingly doing atrade in the market.In the profession skilldevelopmentisrequired and onedevelop its own skillsin the specific field.Extensive training istaken by an individualin the educationalinstitute and this makespecialist in thespecific area (Mirrleesand Adam, 2010).In case of vocationonefocusondeveloping multipleskills on differentdomain like plumbingand electricity. Bydoing so an attempt ismade to work inmultiple areas.TaxationThere is a distinctionbetween trade andprofession in terms oftaxation. It can beseen that in case oftrade self-employed ortrader is taxed undercase 1 of schedule D.In case of professiontax is charged fromthe case 2 of scheduleD.In case of vocation taxis not charged becauseone is working onmultiple areas at smalllevel. It can be saidthat in terms of taxthere is a differencebetween the trade andprofession.Tax ratesIt can be observed thatthere is no differenceIt must be noted thatbasic tax rate is 20%,Same of profession.
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