Economic Influences Flashcards
What is indirect tax?
A tax imposed on producers by the government.
What are examples of indirect tax?
Cigarettes, alcohol, fuel, VAT
What is direct tax?
A tax levied on the income or capital of corporations and other legal entities.
What are examples of direct tax?
Income tax, inheritance tax, national insurance contributions, capital gains tax, corporation tax
What is income tax?
A tax imposed on individuals or entities in respect of the income or profits earned by them.
How is income tax computed?
The product of tax rate times the taxable income.
What is corporation tax?
Type of direct tax levied on the income or capital of corporations and other legal entities in the Uk. Imposed at the national level or local level in some countries.
What is VAT?
A consumption tax on goods and services levied at each stage of the supply chain where value is added.
What is capital gains tax?
A levy on the profit that an investor makes from the sale of an investment such as stock shares.
How does an increase in tax negatively impact a business?
Will reduce the customers disposable income, people will have less money to spend on goods resulting in lower demand and sales revenue for the business.
What is government spending?
Spending by the public sector on goods and services such as education, healthcare and defence.
What is legislation?
A set of laws put in place by the government which businesses must operate with to protect businesses, customers and employees and the environment.
What is customer protection legislation and what act does it follow?
The basic rules which govern how businesses sell and customers buy. The consumer rights Act 2015.
What is employee protection legislation and which act does it follow?
Protection measures against suffering that may occur. The Employment rights act 1996.
What is environmental protection legislation and which act does it follow?
Framework of rules businesses must follow to protect the environment. The Environmental Act 1990.
What is the competition policy legislation and what act does it follow?
Laws that prohibit anti-competitive arguments between businesses. The competition Act 1998.
What is health and safety legislation and what act does it follow?
Duties on employers to ensure their employees are safe within the workplace.
