Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

BUS167 - Principles of Taxation > Seminar 1 > Flashcards

Seminar 1 Flashcards

1
Q

What are the types of tax in the UK?

A
  • income tax (individuals)
  • capital gains tax (individuals)
  • inheritance tax (individuals)
  • corporation tax (companies)
  • value added tax VAT (individuals)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the two types of tax?

A

Indirect & direct

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the purpose of taxes?

A

taxes fund governmental public services (e.g., police, ambulance, NHS etc.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What does PAYE stand for?

A

Pay as you earn income tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is capital gains tax?

A

tax on the profitable sale of an asset that has appreciated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is income tax?

A

tax on your income as an individual

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is corporation tax?

A

taxes on a companies’ profits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is VAT?

A

Value added tax, taxes levied on the sale/purchases of goods/services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How does direct taxes work?

A

taxes charged on income, profits or gains and are either deducted from the source or paid directly to tax authorities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Who administers these tax laws?

A

HMRC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the main direct taxes?

A

income tax
capital gains tax
inheritance tax
corporation tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How are indirect taxes paid?

A

Indirect taxes are paid to the vendor as part of the purchase price of the item and the vendor then passes the tax on to the tax authorities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How do indirect taxes work?

A

taxes on spending and are charged when a taxpayer buys an item

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a vendor?

A

a vendor is a company or individual offering something for sale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the main indirect taxes?

A

value added tax
customs duties & excise duties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the 3 sources of tax law?

A

statute law
EU Directives
case law decisions taken by judges

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what is the tax year for individuals?

A
  • 6th april - 5th april
15
Q

what are tax years for individuals also referred to as?

A

“fiscal years” or “years of assessment”

16
Q

what is the tax year for companies?

A

april 1st - march 31st

17
Q

corporation tax years are also known as …

A

financial years (FYs)

e.g., FY2022 runs from 1 April 2022-31 March 2023

18
Q

what is HMRC?

A

HM Revenue & Customs

a body of civil servants headed by the commissioners for revenue & customs

19
Q

what is self-assessment?

A

the system used to assess an individual’s liability to income tax is known as self assessment

20
Q

when must self assessment tax returns be filed?

A

by 31st october on paper
by 31 january electronically

21
Q

what does POA stand for?

A

payment on account

22
Q

what is tax evasion?

A

illegal and dishonest way to not pay tax (concealing income information)

23
Q

what is tax avoidance?

A

legal and intelligent way to minimise tax burdens (loopholes)

24
Q

what does GAAR stand for?

A

general anti-abuse rule

25
Q

what is GAAR?

A

HMRC making adjustments to a tax payers’ tax liability to counteract abusive tax arrangements

26
Q

who are taxable persons?

A
  • UK residents
  • non-UK residents pay tax on UK income
  • corporations pay tax on profits, not income tax
27
Q

what are the different classifications for income?

A

employment income
property income
trading income
interest
dividends

28
Q

what are exempt income examples?

A
  • ISAs income (individual savings accounts)
  • national savings certificates income
  • some social security benefits
  • premium bond winnings
29
Q

what are the 3 tax rates?

A
  • basic rate (20% on first 37,700)
  • higher rate (40% on next 112,300)
  • additional rate (45% above 150,000)
30
Q

what is the UK personal allowance?

A

£12,570

31
Q

personal allowance isn’t available when one’s net income exceeds…

A

£125,140

32
Q

personal savings allowance isn’t available when one’s taxable income exceeds…

A

£150,000

33
Q

what are the tax rates and allowance for dividends?

A

Ordinary rate - 8.75%
Upper rate - 33.75%
Additional rate - 39.35%

allowance is up to £2000

34
Q

what does PSA stand for?

A

personal savings allowance

35
Q

what is savings income?

A

savings income includes income from bank and building society interest, interest on government securities and loan interest

36
Q

what are the various types of income?

A

ns - non-savings income (employment)

s - savings income (bank interest, loan interest)

d - dividends income

37
Q

what is the savings allowance for various tax rate bands?

A

basic rate band - £1000 PSA
higher rate band - £500 PSA
additional rate band - £0 PSA

38
Q

what is the starting rate band?

A

£5,000 of your savings income is tax free for basic rate taxpayers

BUS167 - Principles of Taxation (16 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions