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Income Tax and Corporation Tax - Essay Example

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Masters
Author : jasperdach
Essay
Finance & Accounting
Pages 9 (2259 words)

Summary

In this paper the researcher will be mostly focusing on income tax and corporation tax. The researcher of this essay aims to pay special attention to income tax and corporation tax in such issues: scope, taxable income, tax rates and tax period…

Extract of sample
Income Tax and Corporation Tax

The paper tells that income tax is charged on the income of all UK residents. Income tax is basically charged to all the individuals. That will include employed, self-employed or un-employed individuals. For employed individuals, the basic source of income will be their salaries along with other sorts where as the self employed individuals will be charged on their trading income. 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. Corporation tax is payable by limited companies or some other unincorporated businesses, which are UK resident. Such UK resident companies pay tax on their comprehensive income. A company is called a UK resident; if it’s incorporated in UK or even if it isn’t incorporated in UK then it is centrally managed and controlled in UK. In determining where the company’s central administration is positioned, the HM Revenue and Customs will focus on the highest level of the company. Especially where the board is located and where all the meetings of the board are carried out. If a company is a non-resident then it is not liable for corporation tax. But if it carries out its trade through a permanent institution like a branch or agency which is a UK resident, then in that case the profits from that institution are liable for tax. From the paper we will see that though rates related to income tax are constantly being increased and the allowances being decreased, no such progressive changes are seen in the corporation tax strategy. ...
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