Flashcards in 2:1 Income tax Deck (10)
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1
What did the HMRC Research Report No 177 find? (3)
1/2 of taxpayers never check their income tax and national insurance payments
Only 40% who paid income tax or national insurance in the last 3 years knew how much they paid
Over half of all individuals were interested in seeing how their income and NCI's contribute to areas of government spending
2
What is the history of income tax? (First introduction) (4)
Relatively new and mainly used to fund wars - introduced in 1799 to fund Napoleonic War by PM William Pitt
- The self assessment system was unpopular and
widely evaded
- Only raised £6m instead of £10m predicted
- Repealed by next PM Addington in 1802 after the
war
3
What is the history of income tax? (2nd introduction) (4)
Re-introduced in 1803 when war restarted
- More progressive and much more popular
- Source of scheduler system & tax deduction at
source idea
- Repealed again in 1816 at the end of war
4
What tax did the UK tax system rely on between 1816 and 1842 (2)
Customs & excise duties
Land taxes
5
When was Income tax re introduced and with what amendments? (3)
1842
- Right to appeal
- System of penalties
- Supposed to be temporary tax ( still is - reintroduced each FA)
6
When was Pay As You Earn (PAYE) introduced?
1944
7
Why did the income tax stay?
Creation of welfare state required regular income stream to fund it and this came from income taxes
8
What is the marginal rate of tax for some taxpayer in the UK right now?
62%
9
How is income tax paid? (2)
Deducted at source - collected from the person paying the income rather than person receiving it e.g. debenture interest
Direct assessment - The tax payer works out what they need to pay and pays tax to HMRC on a given date
10
