Taxes

Question 1

Indirect taxes

Answer 1

These are taxes on expenditure/spending.They are paid to the tax authorities not by the consumer,but indirectly by the suppliers of the goods or services

Question 2

Direct taxes

Answer 2

These are taxes on income and profits paid directly by the bearer to the tax authority

Question 3

Income tax

Answer 3

A tax taken out of a persons income in the UK,income tax is progressive those earning more money pay a higher proportion of their income in tax

Question 4

National insurance

Answer 4

This is taken as a contribution towards the state pension and treatment under the NHS (employer also contributes)

Question 5

VAT

Answer 5

Value added tax

Question 6

What is the standard rate of VAT

Answer 6

20%

Question 7

Tax on products

Answer 7

Duties and excesses

Question 8

Purpose of taxes

Answer 8

Taxation raises large amounts of revenue for the government to spend on public services such as education and healthcare

To control economic activity ie through stamp duty to control house prices

To encourage or discourage purchasing certain products

Question 9

Corporation tax

Answer 9

A tax on products (profits) made by companies

Question 10

What does corporation tax do

Answer 10

Another form of revenue for the government to collect

A low corporation tax rate encourages uk entrepreneurs to stay in the UK and also increase overseas entrepreneurs to move their business in the UK