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European Commission

   

Added on  2020-02-05

13 Pages3610 Words138 ViewsType: 138
Political Science
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PERSONAL TAXATION
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INTRODUCTIONTax is a sum of money which is taken by the state government on earning and purchasingas well. In the taxation world, there are mainly two types of taxes such as direct as well asindirect taxes. Those taxes which are directly taken on income or earnings which are generatedthrough economic activities, known as direct tax. Further, indirect taxes are taken from goodsand services from customers and users. In different country taxation rules and regulations arevaried and percentage of taxation amount as well. In the present report there is a person Isabellewho commenced or started a business as a Personnel Recruitment Agency, name is FroggyRecruitment. Here the owner has not any knowledge regarding tax rates and taxation which arepaid on different types of incomes generated. The report shows statement of tax liability forIsabelle at the end of tax year 2016-17. Further, it shows various rules of non-domiciled status ofUK taxation. At the last it describes about tax position or rules of Apple corporation in thecountry Ireland.PART 1Calculation of tax liability of Isabelle for the tax year 2016-17The Isabelle who has to pay taxation amount on incomes generated from differentavenues. On different incomes of sources and levels taxation amount varied and on the basis ofthat he has to pay to state government of UK (Morellec and Schürhoff, 2010). In the present caseIsabelle has tax liability at the end of tax year 2016-17 which is shown on below:ParticularsAmount (in £)Amount (in £)Gross profit93040Add: rental income @ 10%9304Other incomesPremium on rental60000Dividend income9000Interest income on saving account4000Total other incomes73000Total gross profit£1753441
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Less: expensesDepreciation @ 8%7443.2Wages and salaries @ 10%9304Rent and other expenses @ 30%Utility costs @ 12%11164.8Printing and stationery costs @ 5%32.5Motoring expenses @ 7%98Depreciation on car5333Cost of PC and accessories4000Expense on pension plan5000Total expenses£42375.5Net profit£132968.5Taxable amountTax on net profit @ 40%53187.4Tax on dividend income @ 7.5%675Tax as per Class 2 national insurance contributions @ 2.80per week145.6Tax as per Class 4 national insurance contributions @ 2%2659.37Total tax liability£56667.37From the above mentioned table of tax liability it can be interpreted that Isabelle has totalgross income from its business is worth of £175344. Further, there are various expenses are to bepaid by the owner from its total gross profit. Total expenses of Froggy recruitment are such asworth of £42375.5 which is paid from the gross income generated by it. After deducting totalexpenditures from gross income total net profit remains is worth of £132968.5. In addition tothis, there are different types of taxes are paid by the owner on different incomes. Hence, total2
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