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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- Repealed by next PM Addington in 1802 after the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- Repealed again in 1816 at the end of war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

When is tax paid?

Instalments on 31 January in year and 31 July after year end

Balancing payment the due 31 January after year end