Government taxation

• What is the impact of the economic climate on businesses?

  It affects prices, investment, and employment
• How does consumer spending influence businesses?

  It affects prices and investment decisions
• What is a tax?

  A financial charge by the government
• What types of taxes exist in the UK?

  Income tax, corporation tax, VAT, council tax
• What is income tax charged on?

  Income from employment or investments
• What is corporation tax?

  A charge on a company’s profits
• What do National Insurance contributions cover?

  Healthcare, state pensions, and benefits
• What is VAT charged on?

  Sales of goods and services
• How is VAT collected?

  By businesses, then passed to the government
• What is council tax based on?

  Property value and household size
• What is the impact of taxation on businesses?

  It affects investment and consumer spending
• How does an increase in income tax affect consumers?

  Consumers have less money to spend
• What happens when VAT increases?

  Consumers pay higher prices for goods
• How does inflation affect businesses?

  It increases costs for businesses
• What are the types of taxes in the UK and their purposes?

  • Income tax: Charged on individual income
  • Corporation tax: Charged on company profits
  • National Insurance: Covers healthcare and benefits
  • VAT: Charged on sales of goods and services
  • Council tax: Based on property value for local services
• What are the effects of increased income tax and VAT on consumers and businesses?

  • Increased income tax:
  • Less disposable income for consumers
  • Reduced consumer spending
  • Lower business investment

  
  

  • Increased VAT:
  • Higher prices for consumers
  • Reduced purchasing power
  • Potential inflation affecting business costs