Business Law Flashcards
Who pays income tax?
Employees
Sole traders / Partners
Shareholders
Lenders
What income is taxed?
Wages
Rent earned
Dividends
Income tax: deductible expenses
Necessary business expense, only for purpose of business
Income tax: exemptions
Donation to charity
Qualifying loan interest payments
YOUR INCOME WILL BE TAXED LOWER
Income tax: reliefs
Personal allowance £12,000
Marriage allowance: can transfer £1,200 to your spouse
Blind person’s allowance
Property income allowance
Trading income allowance
Dividend allowance
Savings allowance
Income tax: Order of how personal allowance is used up
Wages
Savings interest
Dividends
What is capital gains tax due on?
Gains following disposal of an asset including gifts (taxed at market rate)
Assets subject to CGT
Personal possessions sold for over £6k
Property
Shares
Business assets
Exemptions and reliefs for CGT
Gifts to spouse or charity
Private residence relief
Loss relief
Business asset disposal relief
Investor’s relief
Annual allowance £6k
What is corporation tax due on?
Profit made
Exemptions and reliefs for corporation tax
Trading loss relief
Capital loss relief (lost when disposing an asset)
Roll over relief: after disposing business asset then replacing it
What is VAT taxed on?
Most goods and services
Business assets
Commissions
VAT exempt items
Land
Insurance
Financial services
Education
Health services
Postal services
VAT zero rated items
Food
Books / newspapers
Water
Transport
Residential construction
Who must register for VAT?
Businesses with taxable turnover of over £85k
