UK Tax Environment : Report
16 Pages4720 Words50 Views
Added on 2020-01-23
UK Tax Environment : Report
Added on 2020-01-23
ShareRelated Documents
TAXATION 1
Table of ContentsTaxation ...............................................................................................................................................1INTRODUCTION................................................................................................................................3TASK 1.................................................................................................................................................31.1 Describing the tax environment of UK......................................................................................31.2 Analyzing the roles and responsibilities of tax practitioner.......................................................41.3 Explaining the tax obligations of tax payers or their agents along with the implications of non-compliance ...............................................................................................................................6TASK 2.................................................................................................................................................72.1 Calculating relevant income, expense and allowances .............................................................72.2 Assessing the taxable amount for the employment at supermarket and calculating self employment income ........................................................................................................................82.3 Completing relevant documentation and tax return for Susan .................................................9TASK 3...............................................................................................................................................103.1 Calculating chargeable profit for the company .......................................................................103.2 Calculating the tax liability of the company............................................................................113.3 Explaining the ways through which one can deal with the income tax deductions ................12TASK 4...............................................................................................................................................124.1 Identifying chargeable asset ....................................................................................................124.2 Calculating capital gain and losses .........................................................................................124.3 Calculating the tax payable capital gain .................................................................................13CONCLUSION..................................................................................................................................14REFERENCES...................................................................................................................................152
INTRODUCTIONTaxation is the source through which the government finance their expenses by levying taxon the citizen and corporate entities. The main aim of the government behind taxation is toencourage or discourage the certain economic decisions. For the purpose of taxation, UKgovernment has framed and introduced several rules and regulations in relation which taxpractitioners, corporate entities must follow while determining their obligation. In this way, bycharging suitable amount of tax, government can collect and employ fund in the productiveactivities. The present is based on different case scenarios which will shed light on UK taxenvironment. Further, it will develop understanding about the roles and responsibilities which taxpractitioner need to perform. This report will also describe the ways through which one cancalculate the taxable income, loss and capital gain. TASK 11.1 Describing the tax environment of UKIn UK, each and every individual who are earning is obliged to pay tax to the governmentthrough the means of tax department and the authority such as Her Majesty's Revenues andCustoms (HMRC). It is the responsibility of such authority to make available fund for the publicservices and welfare by imposing tax on the citizens etc. HMRC is assigned with the responsibilityto gather tax from both individuals and corporate entities through the means of both direct as wellas indirect tax (Devereux, Liu and Loretz, 2014). Besides this, HMRC works with the treasurysystem of UK for ensuring the smooth functioning of tax system. In accordance with the UK taxframework, there are mainly two types of tax which are as follows:Direct tax: Obligations which are determined on the basis of income, profit or gains in terms oftax are termed as direct taxes. Such gains are either deducted or paid by the tax payer to the relevantauthorities when it becomes due. Examples of main direct taxes include income, corporation andcapital gain related obligations. All the direct tax related obligations are administered and controlledby HMRC. Income tax: This type of tax is paid by the individual partnership companies and citizenswhose income level crosses the predetermined limit. Income tax is charged on the moneyearned by the individual from employment, self-employment, and interest on saving, shares,rental and pension gain (Tiley and Loutzenhiser, 2012). Besides this, at the time ofdetermining tax obligations of the individual HMRC segregates it into three types such assaving, non-saving and dividend income. For the purpose of assessing suitable tax amount3
IT Act 2003, Capital Allowance Act (CAA) 2001 is undertaken by HMRC. Corporation tax: Such kind of tax is paid by the business corporations in accordance withthe laws and legislation of IT Act 2003, Income and corporation Taxes Act (2001). Capital gain tax: It occurs when investors receive higher money by selling the assets orshares in comparison to the purchase price. Indirect tax: It refers to those which are levied by the government on goods and services rather thanon income or profit aspect. Indirect taxes which are charged by UK government include sales tax,VAT (value added tax) and GST. VAT: In UK, VAT is charged by UK government on the good or services which are importedby the business entities from outside the European Union (Mertens and Ravn, 2013). Ratesof VAT highly vary in accordance with the goods or services in the following manner: Standard = 20% Reduced = 5% Zero = 0% On the basis of the above mentioned table, goods which come into the category of reducedrates are domestic fuel and power, installing energy saving material, sanitary hygiene products,children car seats etc. Along with this, goods or services which are free from the VAT obligationsinclude food but not meals in restaurant, books and newspapers, children clothes as well as shoes,public transport etc. Excise duty: This tax is charged by UK government on goods which are produced within thecountry (Lecca and et.al, 2014). Hence, it is highly related to the production or sale of agood. Examples of excise duty include alcohol and tobacco. Custom duty: Such kind of duty is charged by the UK government on importation of goodswhich are produced by other countries except EU. 1.2 Analyzing the roles and responsibilities of tax practitionerTax practitioner is the one who fulfils obligation of the third party in relation to SARS returnfor reward or fee. Usually, tax payers take assistance of professionals for determining their financialobligations because they have deeper insight about the rules and regulations which are related to it(Brewer and et.al, 2013). In this way, tax practitioners provide high level of assistance to the payersin filing the return according to HMRC. In this regard, there are several roles and responsibilitieswhich tax practitioner need to perform which are as follows:Roles of tax practitioner 4
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
UK TAXATION INTROUCTIONlg...
|4
|4017
|452
(solved) Essay on Taxation of UKlg...
|18
|5214
|42
Report On UK Taxation Environmentlg...
|17
|4968
|303
Assignment on Taxation- Tax system in UKlg...
|20
|4991
|140
UK Tax Environment : Assignmentlg...
|6
|5330
|47
UK Tax Environment- Reportlg...
|19
|5319
|27