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Assignment example - Taxation

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Undergraduate
Assignment
Finance & Accounting
Pages 8 (2008 words)
Integrating the benefit and income tax systems into one system Author Institution Instructor Date 1. Description of the current system In the current UK taxation system, income tax system is different from the benefit system. Income tax system has two different types of taxes – income tax and national insurance…

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These two systems worked independently in the past and the tax authorities maintained separate tax systems for income tax and national insurance contributions. Income tax was taxed annually in a progressive manner on individuals and corporate bodies whereby low income earners were taxed lower than high income earners (UK Government, 2012). The tax rates increased with increase in incomes of individuals. On the other hand, benefits are payments to individuals by the state. They are paid to individuals through the bank, credit union account or building societies. If one does not have any of these accounts, he/she may be paid through Post Office card account. There are various types of benefits in UK. Attendance allowance is a tax-free benefit paid to individuals of over 65 years who are mentally or physically handicapped. Two rates of up to ?71.40 are payable per week. Carer’s allowance is payable weekly in advance or every 4 or 13 weeks. Child benefit is a universal claim by parents for their children (BBC News, 2012). They are paid after every four weeks in normal situations and weekly for single parents. Tax credit is also paid weekly or after every four weeks, to families with children, whether the parents work or not. ...
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