Types of taxes Flashcards
(10 cards)
What is…
Income tax?
(direct tax)
Paid by individuals, based on their profit
Individuals → government
Paid once an individual earns above the personal allowance
What is…
National insurance?
Direct tax
Taxes that fund state benefits
Individuals → government
Examples of state benefits include The NHS, pensions, unemployment support
Paid once you’re over 16 and earning more than the thresholds
What is…
Corporation tax
Direct tax
Paid by businesses, depending on their profit levels
Business → government
More profits =more tax
What is…
Capital gains tax?
Direct tax
Tax on the profit made from the sale of an asset that has increased in value
Asset seller → government
A capital gain is the profit you make when you sell something for more than you paid for it.
What is…
Inheritance tax?
Direct tax
Tax on an estate
Person responsible for the estate → government
An** estate** is a valuable asset e.g. property, money, possessions
What is…
Value added tax?
Indirect tax
aka (VAT)
Tax on products / services
Customer pays* businesses* → businesses pays * government*
Added to the price of goods and paid on certan products like electronics and clothes
What is…
Excise duty?
Indirect tax
Tax on products that the government wants to conrtol or discourge
Customer pays* businesses* → businesses pays * government*
Domestic products include alchohol, tobacco, fuel
What is…
Customs duty?
Indirect tax
tax paid on imports (and sometimes exports)
Importer → government
passed into customer → importer
This is put in place to protect local industries and raise government revenue
What is…
Council tax?
Direct tax
Tax on homes to support social services
home owner → council
depends on the value of your property and applies to renters too (landlord may include it in the rent)
What are…
Business rates
Direct tax
Tax on business property
Business → government
Examples of domestic properties include shops, offices, pubs, factories, homes
