Taxation Assignment Solution

TAXATION
By
TABLE OF CONTENTS
INTRODUCTION1
TASK 11
1. Brief introduction of the given scenario1
2. Defining taxation with its different systems1
3. Explaining 4 direct and 4 indirect taxation system in UK2
4. Considering taxation legislation in the context of Uber3
2. Interrelationship between taxation system of two nations4
TASK 24

1. Explaining meaning of unincorporated organisation 4
2. Characteristics and background of unincorporated organisation4
3. Explaining advantages and disadvantages of operating an unincorporated organisation5
4. Explaining what is mean by personal taxation and taxation which relates to sole trader
and partnership5
TASK 37
1. Explaining meaning of incorporated business 7
2. Describing the characteristics of incorporate organisation7
3. Explaining the advantages and disadvantage of incorporated business7
4. Differentiating between private and public limited companies8
5. Explaining the taxation advantages for each company9
TASK 49
1. Meaning of ethics9
2. Explaining difference of ethics from nation to nation10
3. Explaining appliance of ethical constraints across different cultures10
4. Impact on different organisation of legal and ethical constraints10
2. Explanation of ethical and legal practises which apply to both business and individual
formats11
3. Evaluating companies requirements11
CONCLUSION12
REFERENCES13
INTRODUCTION
Taxation is considered as the term in which taxing authority levies or imposes tax. It
generally applies to all types of services whether it is to income to capital gain or to estate
taxes. However, tax is term which is levied in almost all the countries because it is the source
of income for government (Snape, 2015). In this report explanation will be discussed on the

taxation and on types of system. Further, information will be provided on 4 direct and 4
indirect system of taxation of UK. National taxation system and comparison of such system
with another country will also be discussed in this report. Moreover, meaning of
unincorporated and incorporated organisation with its advantages and disadvantages will be
explained with the example of Ford Motors entity. Lastly, in this report explanation will be
provided on the term ethics and its appliance with different culture. Taxation is relevant as it
assist in increasing the development of the economy. With the help of taxation the ford
motors will be able to understand importance of taxation to have money supply in the
economy.
TASK 1
1. Brief introduction of the given scenario
In this report, scenario has been given of the Ford Motors Plc which incorporate its business
in the UK and considered as resident trading entity. Generally, the entity has branches in US,
Hungary and UK and in all the three countries company agreed for establishments of
permanent taxable system. From the given scenario, it has been analysed that entity is making
profit in UK and with its continue operation it will make profit in future as well. In such
country, entity is paying tax with the rate of 20%. Company has further initiated a freehold
property in the US in order to operate business operation of UK and paying the rate with the
rate 21% and in Hungary, paying the rate of 9%. Thus, this report will critically analyse and
compare taxation system of different countries. Aim of this report is to carry a deep
knowledge regarding the taxation system of the economy, its ways and consideration.
2. Defining taxation with its different systems
Taxation is considered as the term which is mandatory charge which levied by government
authority upon taxpayer in order to generate source of income so that they will able to fund
various expenditure of public (Rick, Paolacci and Burson, 2018). In other words, it is the
source through which fund will get raise goods and services which adequately cannot be
produced in the competitive market. There are two types of taxation system which include
indirect and direct.
Direct tax is considered as the tax which directly paid by government to taxpayer. It is the
type of tax which can be applied to both individuals and organisation directly by government.

For example: income tax, corporation tax and wealth tax. In this process, burden of tax will
not be transferable.
Indirect tax is considered as the type which is applied on manufacturers on sale of goods and
services (Hussain and Liu, 2018). As the name suggest, it is the type of tax which applied
indirectly which is initially paid to government by intermediary. Further, such amount will
pass on to the value of goods and services and such will then passes to end users.
3. Explaining 4 direct and 4 indirect taxation system in UK
In order to clearly analyse the taxation system of UK, following are the 4 direct and 4 indirect
taxation systems:
Direct tax-
Income tax: In UK, tax system is generally based on marginal tax rates. It is a tax which
generally levied on the income which includes earning from employment, pension income,
occupational income, rental income, income from the trust etc.
Corporation tax: It is the type of tax which levied on the entities which are operating its
business operations in UK with a rate of 19%. It generally levied on the profits of company
which is calculated and paid annually during an accounting year.
Capital gain tax: It is the tax which generally charged with the rate of 28%. It is the type of
tax which charged on individual and organisation when any asset or property been sold or
disposed of.
Statutory payments: It is the type of payment which are made to employees in order to
cover their earning which lost when they are absent from their work due to any kind of
reason.
Example of direct tax consist of income tax applicable on the income of individual person.
Ford Motors by paying corporate tax on the profit earned which is a direct tax
Indirect tax-
VAT: It is the type of indirect tax which generally charged on the sale of businesses such as
goods and services, hiring or loaning goods to someone, commission, selling of business
assets etc. Its current threshold limit includes £85000.