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Finance and Accounting Essay: Income Tax and Corporation Tax
Finance & Accounting
Pages 10 (2510 words)
INCOME TAX and CORPORATION TAX Many other countries have designed their taxation systems on the basis of UK tax system. In this paper, we will be mostly focusing on income tax and corporation tax. Income Tax: Scope: Income tax is charged on the income of all UK residents.
Un-employed individuals may have their income coming from savings or investments. There is no maximum age limit for any individual to be exempt from income tax. Taxable Income: Income on which tax is calculated is called the taxable income. There are a few sorts of incomes that are non-taxable as well. Taxable income will include all sorts of incomes for example, an employed individual’s salary or a self-employed individual’s profits from his trading activities, bank interest earned on any deposit or savings accounts, dividends earned by individuals on their investments in different companies and any rental income earned on any property, all these types of incomes are grouped under various headings. Rental income, salary or trading profits fall under the category of non-savings income, interest received from banks is grouped under savings income and the dividends received are taxed under dividend income (Finney, 2004). For a salaried individual, the income will include all the benefits, like car and fuel allowance and accommodation benefits. For self employed persons, the basic allowance they get against their trading income includes capital allowance. Under capital allowance, allowances are given under plant and machinery utilized for trading purposes. ...
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