The U.K taxation system - Essay Example

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The U.K taxation system

The paper tells that taxable income includes income from employment either from part-time, full-time, or temporary employment. However, if people receive benefits or perks from their employer, they may be taxable. Income from partnerships or self-employment, pension income such as state pension, retirement annuity and personal or company pension, are also taxable as stated in the UK tax laws. Additionally, pensioner bonds, trust income and investment income, includes dividends on company shares except dividend income from ISAs, are also taxable. Other taxable income includes Rental income, State benefits such as Carer’s Allowance, Jobseeker’s allowance, Employment and Support Allowance, Incapacity Benefit, and weekly Bereavement Allowance among others. The income tax rates in the UK depend on an individual’s personal income. According to Adam, Kaplan and Institute for Fiscal Studies, the 10% rate shows the tax rate for anybody who saves an income of up to GBP 2,400. The dividend income below GBP 37,400 is taxed at 10% while that above GBP 37,400 to GBP 150,000 is taxed at 32.5%. In addition, a tax of 42.5% is taxed on dividend income above GBP 150,000. Thus, this shows that income tax is lower in the UK than most countries including New Zealand and Australia. The relevant tax period in the UK starts from 6th April to 5th April in the next year. This includes both income tax and personal taxes. For instance, the 2010-2011 tax year started on 6th April in 2010 and ran through to 5th April 2011. ...
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Summary

The paper operates mainly based on research questions which can be stated as follows: Who is taxed and under what circumstances? What is the relevant tax period? What is the relative importance of direct and indirect taxes in United Kingdom? What are the implications of this?…
Author : bernard20

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