TAX
ISSUES
Who
is a taxpayer?
"A
taxpayer is anyone who does not have to pass a civil service
examination/test/interview to work for the government in power." The taxpayer is
I, you, child, mother, father, grand dad/mum, company, corporation, investor,
adviser, government official, employer, employee, self-employed and
everyone.
Exclusion
Clause:
Taxation
is a complex subject. It is always evolving. Therefore, anyone who uses this
article or part of it, without first seeking professional advice from us or any
other tax adviser, does so at his/her own peril. We are 100% NOT LIABLE to any
effects s/he suffers. This is nothing free for businesses or individuals. There
is always catch 22-situation cases somewhere.
What
is Tax?
It is a
charge/levy on income or revenue generated by individuals, entities, companies,
corporations, clubs, groups, etc. as the result of using the resources available
in a system or in the society/state or in the world. Taxes are very necessary -
"necessary evil" - as they generate income for governments to carry out economic
programs for the good of mankind.
What
is Tax Evasion?
This is
the practice whereby passive citizens attempt to dodge paying legitimate taxes
for the growth of society. It is a criminal offence. When caught, the state law
will have its course. Take proper note please.
What
is Tax Avoidance?
It
is the opposite of tax evasion. It is permissible under law. This is the
practice in which the taxpayer arranges his tax affairs within the ambit of the
law to pay minimum taxes. For example, if a higher taxpayer donates to
charity/ies, the charities claim the tax suffered by the taxpayer (giving more
money to charities) while the basic rate band is extended for the higher
taxpayer; or setting some money aside from profits to pay for the taxpayer's pension (depending on age of
taxpayer). They are allowable.
How
does the government set the tax systems?
There
are laid-down tax rules (generated over time) contained in various acts of
parliament, depending on the type of tax to be paid. The main taxes
are:
|
Tax |
Suffered
by: |
Source |
|
Income
Tax |
Individuals
Partnerships
Trusts |
Income
and Corporation Taxes Act 1988 (ICTA 1988) and subsequent Finance Acts;
Capital Allowances Act 2001 (CAA 2001; Income Tax (Earnings and Pensions)
Act 2003 (ITEPA 2003) |
|
Capital
Gains Tax |
Individuals
Partnerships
Trusts
Companies |
Taxation
of Chargeable Gains Act 1992 (TCGA 1992) and subsequent Finance
Acts. |
|
Value
Added Tax |
Businesses,
both incorporated and unincorporated |
Value
Added Taxes Act 1994 (VATA 1994) and subsequent Finance
Acts |
|
Inheritance
Tax |
Individuals
Partnerships
Trusts |
Inheritance
Tax Act 1984 (IHTA 1984) and subsequent Finance
Acts. |
Each
tax system comes with its own rules and regulations. We will be taking the
individual taxes one after another in future articles. Watch this space from
time to time. Before you leave this site, here are some of the Personal Tax
Allowances contained in the Finance Act 2003.
PERSONAL TAX
ALLOWANCES
(Allowances
that reduce income for Tax purposes)
|
|
2003/04 |
2002/03 |
|
Personal
Allowance under 65
Personal
Allowance 65-74
Personal
Allowance over 75
Blind
Person's Allowance
Married
Couple's Allowance 65-74
Married
Couple's Allowance over 75
Children's
Tax Credit*
Children's
Tax Credit - Baby Rate* |
£4,615
£6,610
£6,720
£1,510
£556.50
£563.50
Abolished
Abolished |
£4,615
£6,100
£6,370
£1,480
£546.50
£553.50
£529.00
£1,049.00 |
|
|
|
|
·
The Child Tax Credit replaces the children's Tax Credit, which is
a payment to the main carer and no longer a tax allowance.
Please reach your telephone and call us if you want more tax
information
S O Tudor &
CO 