Taxation Flashcards

1
Q

Revenues

A

Money coming in (it is not guaranteed)

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2
Q

Direct Taxes

A
Paid directly to the government
• Income tax
• Inheritance tax
• National Insurance contributions (Health Service)
• Capital gains tax (Business)
• Corporation tax
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3
Q

4 Indirect taxes

A

1) VAT
2) Stamp duty
3) Excise duty
4) Council tax

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4
Q

VAT

A

Value Added Tax

Paid or many goods at services at 20% of the price

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5
Q

Stamp duty

A

A tax paid on the purchase of property

* Low stamp duty can encourage people to buy houses

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6
Q

Excise duty

A

An extra tax placed on items like fuel, alcohol and tobacco

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7
Q

Council tax

A

A local tax raised by the Local Council based on the value of your property which helps to pay for

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8
Q

Why taxation?

A

1) Paying for government expenditure
2) Managing the economy
3) Changing behaviour - Discourage smoking by raising the excise duty on tobacco & alcohol

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9
Q

Income tax

A

A tax on money people receive from their earnings, savings, pensions and benefits. People who earn more pay more tax

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10
Q

National Insurance Contributions

A

A tax based on person’s weekly income that is used to pay for benefits, state pensions

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11
Q

The amount you pay in National Insurance Contributions depends on:

A

1) How much you earn

2) Whether you’re employed or self-employed

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12
Q

Who pay National Insurance Contributions

A

Anyone that’s 16 and over and working in a job or working for yourself (self-employed)
You start paying NICs once your earning reach a certain level
£12 a week

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13
Q

Corporation tax

A

Tax on company profits

• Small companies with profits of less than £300,000 pay 21%

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14
Q

Inheritance tax

A

A tax on the value of the money, property or possession that someone leaves when they die unless the estate is being passed to husband/wife or civil partner.

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15
Q

Capital Gain tax (Business)

A

A tax on profits from investments such as stocks and shares

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