2:1 Income tax Flashcards
(10 cards)
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
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- Repealed by next PM Addington in 1802 after the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
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- Repealed again in 1816 at the end of war
What tax did the UK tax system rely on between 1816 and 1842 (2)
Customs & excise duties
Land taxes
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)
When was Pay As You Earn (PAYE) introduced?
1944
Why did the income tax stay?
Creation of welfare state required regular income stream to fund it and this came from income taxes
What is the marginal rate of tax for some taxpayer in the UK right now?
62%
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
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
