StudentShare solutions
Triangle menu

The U.K taxation system - Essay Example

Nobody downloaded yet

Extract of sample
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. (Adam, Kaplan and Institute for Fiscal Studies, 2002). In the UK, taxes and allowances are usually fixed for any given year, but they often change from one year to another. What is the relative importance of direct and indirect taxes in United Kingdom? What are the implications of this? Direct tax consists of income tax and wealth tax while indirect tax involves central excise duty, customs duty, service tax, purchase tax and value added tax (VAT). Income tax is a direct tax on all incomes that are received by private individuals after some allowances are made. Direct taxes are usually paid directly to the Exchequer by the taxpayer through PAYE, which applies to corporate tax, as well. However, tax liability cannot be forwarded to someone else. Indirect taxes are such as VAT and several excise duties on tobacco, oil and alcohol. Indirect tax, unlike direct tax can be passed onto the final customer by the supplier depending on the price of elasticity of demand and supply of goods. However, over the last twenty years, economists have differed on the optimum mix of taxation between direct and indirect taxes, which has resulted in a shift towards indirect taxation. Economists argue that indirect taxes help in changing the overall pattern of demand for certain products and services, thus, affecting consumer demand such as an increase in the real duty on petrol. Indirect taxes are also useful in controlling and correcting externalities of both production and consumption. Also, they are less likely to interfere with people’s choice between work and leisure than the direct tax. Thus, they have a little negative effect on work incentives. Additionally, they allow a reduction in direct ...Show more


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
The U.K taxation system essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"The U.K taxation system"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Australian Taxation system
Australian Taxation system. Research done in several Australian newspapers has testified that taxation is the backbone of the Australian economy. The country’s system of government is divided into the federal government which controls all taxations that take place in the country.
6 pages (1500 words) Essay
UK Taxation System Essay
All income is not taxable. Tax is applicable only for the income that exceeds the non taxable amount. However there are allowances and relief's which reduce the amount of net payable tax and in certain cases the person need not pay tax. Taxable incomes arises from earnings from employment/self employment, pension income from company, state and personal pensions, interest on savings, income from shares, income from trust and income from rent.
9 pages (2250 words) Essay
Taxation System of UK
Secondly the tax payer must be sure of what he is going to pay, for what reason, the amount and so on. Thirdly the payment of tax must be convenient to the tax payer. For example, quarterly payment of taxes must be arranged in a manner that the tax payer knows when it is due.
10 pages (2500 words) Essay
Corporate Taxation Essay
In any developed economy, the interaction of the Government becomes evident with the corporate world after a certain extent of time and hence the decision of the Government to levy taxes on the Industrial houses for the fiscal budgeting of the nation is called Corporate Taxation.
9 pages (2250 words) Essay
UK Taxation System
Also the structures of certain taxes are also explained in this essay. Apart from this, some figure with respect to the contribution of the different taxes to the total revenue raised are also indicated wherever necessary. All the figures and different information quoted in this paper are extracted from the survey conducted by the Institute for Fiscal Studies on the UK Tax System for the fiscal year 2006-2007.
9 pages (2250 words) Essay
UK source income is generally subject to UK taxation no matter the citizenship nor the place of residence of the individual nor the place of registration of the company. The tax year in the UK, which applies to income tax and other
7 pages (1750 words) Essay
She thought of amending the transportation tax system and wanted to bring a proposal for adding ‘1p per mile’ to all transports in order to pay for the purpose of improvement in United Kingdom. The proposal is of increment in the tax rate of 1 p per
4 pages (1000 words) Essay
However, very few individuals pay the inheritance tax annually considering only a few assets are moved for probation and that the tax has been easy to evade over the years (OECD 2007, 13).
7 pages (1750 words) Essay
Taxation essay
In accordance with the above, taxation entails means by which regime finances its expenses by imposing charges on populaces and commercial entities (Diamond 2011,
7 pages (1750 words) Essay
The 50% rate was imposed on incomes higher than £150,000. This led to mixed reaction to the budget as taxing the wealthy was seen as a very major change in the labor government. Questions were raised as to whether this change would raise the funds anticipated by the
6 pages (1500 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Let us find you another Essay on topic The U.K taxation system for FREE!
Contact us:
Contact Us Now
  • About StudentShare

  • Testimonials

  • FAQ

  • Blog

  • Free Essays
  • New Essays
  • Essays

  • The Newest Essay Topics
Join us:
Contact Us