Introduction to UK Tax Flashcards
(29 cards)
What is taxation
Taxation is a fundamental tool that governments use to collect revenue to finance public services and societal infastructure
What does taxation revenue underpin
Taxation revenue underpins the operation of the state and enables it to deliver essential services
What core institutions of government does tax fund
Taxes fund the core institutions of government - such as Parliament, civil service departments, and the justice system
What does funding government infrastructure ensure
Funding government infrastructure ensures administrative functions can operate smoothly
How do taxes allow for public economy management
Taxes allow the government to redistribute wealth and manage aggregate demand through fiscal policy
What does fiscal policy support
Fiscal policy supports economic stability, employment, and growth
What agencies does revenue from taxes support
Revenue from taxes supports agencies responsible for public and environmental protection, customer rights, and industry regulation
What does regulatory functions and legal system create
Regulatory functions and legal systems creates a fair, safe, and sustainable environment for both individuals and businesses
What welfare programs soes tax support
A substantial portion of tax income supports welfare programs such as:
- Universal Credit, pensions, housing benefit, and disability allowance
- The NHS, which provides free or subsidised healthcare services to all residents in the UK
What public goods do taxes fund
Taxes fund “non-excludable” and “non-rivalrous” public goods that cannot be efficiently provided by the private sector
What are examples of public good provisions
Public goods provisions are:
- Defence and national security
- Police and fire services
- Public education
- National transportation networks
What is tax used for beyond funding
Beyond funding, taxation is used strategically to influence choices, correct market failures, and achieve social or environmental objectives
When are Pigouvian Taxes (Corrective Taxes) imposed
Pigouvian Taxes are imposed to internalise negative externalities
What are examples of Pigouvian taxes
Examples of Pigouvian taxes are:
- Carbon taxes
- Landfill taxes
What is the aim or carbon taxes
Carbon taxes or levies on fossil fuels aim to reduce greenhouse gas emissions
What do landfill taxes discourage
Landfill taxes discourage waste and promote recycling
What are excise duties
Excise duties are applied to products that can harm health, to both discourage consumption and recover healthcare-related costs
What are some examples of public health policies
Examples of public health policies are:
- Tobacco Duty
- Alcohol Duty
- Sugar Tax (Soft Drinks Industry Levy)
What does Tobacco Duty do
Tobacco Duty - reduces smoking rates and offsets NHS treatment costs
What does Alcohol Duty discourage
Alcohol Duty - discourages overconsumption and social harm
What does sugar tax reduce
Sugar tax - reduces sugar intake, especially among young people, addressing obesity and diabetes
How can tax encourage positive behaviour
Taxation can also encourage positive behaviours through exemptions, allowances, or reliefs
What are behaviour incentives of tax
Behavioural incentives of tac are:
- Tax relief for pension contributions
- R&D tax credits
- EV (Electric Vehicle) incentives
What do tax relief for pension contributions encourage
Tax relief for pension contributions encourages saving for retirement
