Managing a Business and a Household: Taxation

Question 1

Taxation

Answer 1

Taxation is a levy imposed by government on indiviuduals and business.

Question 2

Direct taxation

Answer 2

These are taxes levied on the income earned by a household or businesses and paid directly to the government.

Question 3

Indirect Taxation

Answer 3

These are taxes levied on what people spend rather, than earnings.

Question 4

Taxes paid by both households and businesses

Answer 4

1. Vat: Vat is tax on goods and services paid by both the households and businesses.
2. Motor Tax: Motor tax is paid on all motor vehicles that use pubic roads.
3. Capital gains tax (CGT): This is a tax on the gain made when a household or business
   sells an asset e.g land or company shares.
4. Excise duty: This tax is paid on certain goods such as alcohol and tobacco to
   discourage them.

Question 5

Tax credit

Answer 5

A tax credit reduces the amount of PAYE income tax paid by an employee.

Question 6

PPSN

Answer 6

Is a unique reference number assigned to each person in Ireland.

Question 7

Tax evasion

Answer 7

Households and businesses avoid paying the correct number amount of tax. Illegal

Question 8

Tax avoidance

Answer 8

This reduces the tax liability for households and businesses.