Uk Tax System

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Tax in simple terms refers to the government raising money to spend on public services which includes health and social security system and education. Tax levied on a number of goods and services in the form of Value Added Tax (VAT), such as income tax on the money we earn. Tax can also be imposed on various transactions i.e. inheritance and profits from selling homes or antiques. The tax system is a complicated procedure.

The purpose of task A is to provide features of the UK tax system in conjunction with any rules and regulations with regards to UK registered companies. It will also discuss the process in which the tax liability of an individual is implemented. The principle UK taxes will be explained clarifying the
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• What may not be written down at all would be expenditure on commercial buildings and hotel, although fixtures and fittings which are integral in buildings can be noted on a 10% straight line basis. This is forecasted to fall by 8% in 2012-13
• Intangible assets expenditure is also is written down on a straight-line basis with a depreciation rate of 4% or at the discretion of the company.
• However Capital expenditure on plant, machinery and buildings for research and development (R&D), under the R&D allowance, can all be written off against taxable profits straightaway.

In the recent budget relating to the tax year 2011/12 the corporation tax is to be cut by 2% from April and will fall by 1% in each of the next three years to reach 23%. Corporation tax is a tax which is remunerated by limited companies. The tax is charged on the profits of the company. As mentioned previously, corporation tax consists of two types of profits/gains incurred by trading and investments etc. Dividends income is not included as part of corporation tax, it is taxed differently.
This evidently can create alterations within the firms involved. Therefore any limited company which is making profit in the taxable year 2011-2012 must legally pay tax on the profits generated on their trading and investments. Subsequently this would
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