Chapter 1 - 3.1 - Types of UK Tax

Question 1

Define income tax

Answer 1

Income tax is payable by individuals on their earnings, both from self-employment and employment. PAYE is the system under which income tax is collected

Question 2

Define National Insurance Contributions (NICs)

Answer 2

NICs are payable by all individuals who are either employed or self-employed. NICs are also payable by a business (sole trader, partnership or company) in relation to it’s employees

Question 3

Define corporation tax

Answer 3

Corporation tax is payable by companies on all their income and gains

Question 4

Define capitals gain tax (CGT)

Answer 4

CGT is payable by individuals on the disposal of capital assets. Capital assets include land, buildings and shares but also could include smaller items such as antiques

Question 5

Define value added tax

Answer 5

VAT is payable on most goods and services by the final consumer