Economic Influences On Business Flashcards
VAT?
Value added tax
Added to products sale price
17.5% currently
Income tax?
Tax charged directly on personal income
Corporation tax?
Tax on company profit
Council tax?
Tax charged in households by local authorities, based on the estimated value of a property and the number of people living in it
Road tax?
A periodic tax payable on motor vehicles using public roads
National insurance?
The system of compulsory payments by employees/ employers to provide state assistance for people who are sick, unemployed or retired
Stamp duty?
Tax on buying houses/ shares in houses
Excise duty?
Inland tax on the sale of specific goods
Inheritance tax?
Tax charged in property and money acquired by gift or inheritance
Business rates?
Tax on business property
How are businesses effected by high inflation?
- product prices increase
- pressure on the employer
- affected profit margin
How is a country’s economy measured?
GDP Currency value Rate of inflation Imports and exports balance Unemployment figures Tax rates Interest rates Amount of debt
How is a business effected by high unemployment?
- insecurity in workforce
- danger of lost skills
- Recruitment is easier
- lower consumer spending, less demand
How is a business effected by high interest rates?
- customers with debts have less money to spend
- firms with overdrafts have higher costs
- customers save more rather than spending
How are businesses effected by low interest rates?
- Customers invest less money into savings, they buy more, sales rise
- firms with overdrafts will have lower costs
