03)Taxation Flashcards
When will you be paying NIC?
When you earn over the threshold from the ages 16 to retirement age. 65. will be 68 in 2046. 66 by 2020 for both men and women. Pensions act 2011.
How do you pay NIC?
Employers take this from your wage centrally from source. large employers must pay NIC to HMRC electronically by the 22nd of each month if more than 250 people.
if paying in paper must reach HMRC by the 19th of each month.
Why is tax relief given to pension contributions
to encourgae people to save for retirement.
What recent changes were made to pension rules?
Pensions act 2014 (came in 2015) meant you can take up to 25% of your pension as a tax free lump sum provided you were above the age of 55.
Who pays corporation tax?
PLC’s , corporates, clubs, associations and charities
not - sole traders, partnerships and members of LLPs
Corp tax at 20% falling to 18 by 2020.
What new tax was founded in 2015
2015 finance bill founded the diverted profits tax to reduce the amount of income lost to companies diverting or hiding profits using accounting methods.
What does VAT stand for and what type of tax is it?
Value added tax and it is an indirect tax.
As a business when would you need to register for VAT?
if turnover is above certain threshold (83,000) in 2015
What are the benefits of registering for VAT?
charge VAT on certain goods and services
claim back VAT spent on purchasing goods and services for the bank.
Examples of goods or services on the reduced 5% vat
- Contraceptive products
- childrens car seats
- domestic fuel and power
- energy saving materials
Examples of goods and services not subject to any NIL rate of VAT
Insurance
provision of credit
most health services by doctors or dentists
Examples of 0% rated VAT items
food(not meals in restaurants or takeaways) books and newspapers public transport domestic water and sewage childrens clothes and shoes food from
When would you be liable for CGT?
Capital gains tax is a tax on profit gains realised on disposal of an asset
disposal could be : selling, transferring, giving it as a gift,, exchange, transferring, recieving insurance comp for it
gain is taxed not entire revenue
Is everything liable for CGT?
no, personal possessions like cars are exempt if below £6000. Not your first homes either but second homes are.
Entrepreneurs relief? what is it?
Relief given in the sale of a company, max £10million. usually charged 10%
