Business tax Flashcards
1
Q
Who pays income tax?
A
- employees
- sole traders
- partners
- shareholders on dividends
- lenders
- debenture holders
2
Q
what are the three categories of income in the order they are collected in?
A
- non savings income
- savings income
- dividend income
3
Q
non savings income
A
- earnings and pension
- trading income
- property income
4
Q
tax exempt and 0 rated
A
- tax empt: means the income is fully exempt and does not form part of income for the purposes of determine tax brackets.
- zero rated: still forms part of the income to determine the tax bracket but it is taxed at 0%.
5
Q
what are five examples of income which are exempt from income tax/
A
- interests from national savings
- interest or dividends form an ISA
- winnings on premium bonds
- most social security benefits
- child benefits and tax credits/
6
Q
what is the annual investment allowance in the context of capital assets?
A
if a taxpayer buys a capital asset for their business, they can deduct all of the costs if it is plant or machinery but not cars, land, or buildings.
7
Q
when is writing down allowance allowed and what are the % allowances which can be deducted per year for 1) life long assets and 2) other assets.
A
if the capital asset purchase exceeds the annual investment allowance:
- lifelong assets - 6% per year
- other assets - 18% per year.
assets are pooled if multiple
8
Q
income tax
A
i
