This lesson we will be learning about... TAXATION

1. This lesson we will be learning about...TAXATION What types of TAX can you think of?

2. Equal Pay Act 1970 • Female workers should be paid the same as male employees if they are doing the same work in terms of effort, skills and decision making. Sex Discrimination 1975 • Female or male employees should not be at a disadvantage in their employment just because of sex e.g. Women should not be overlooked for promotion just because they have a family. • Sex discrimination covers: Recruitment, promotion, dismissal, employee benefits, help and assistance at work. • The equal pay act is directly concerned with Pay. Race Relations Act 1976 • It’s illegal to treat a person less favorably than others on racial grounds. Disability Act 1995 • Its unlawful to treat disabled people less favorably. Employers must make reasonable adjustments to the working environment Age Discrimination Act (updated 2006) • Can not discriminate on the grounds of age If this is not in your notes – then you will need to add this (or we copy into our books)

3. NO IDEA I NEED HELP NEVER HEARD OF IT OK I CAN DO THIS WITH SUPPORT SOME GUIDANCE NEEDED NEARLY AT MY TARGET GOT IT! VERY CONFIDENTWILL HIT MY TARGET GRADE EXCEED TARGET LEARNING OBJECTIVES To explore the main taxes a small business will have to pay — VAT, corporation tax, income tax and National Insurance contributions.

4. Starter How much do you know about taxation E.g. Income Tax, Corporation Tax, VAT… What is taxation? Who collects it? What is the purpose? It’s a % of earnings, or income and is collected by the INLAND REVENUE, it is used to provide services such as police, NHS etc

5. HMRC • Her Majesties Revenue and Customs • They collect TAXES and administer BENEFITS

6. Read and glue in TAX - Theory Key Facts • HM Revenue & Customs – the government authorities in the UK responsible for collecting tax • Records – Evidence of what has happened in the past; records could be kept in paper form or in computer files for example • VAT- A tax on the value of sales (sales revenue); it is paid by businesses to the government. A small business only has to pay VAT if its sales are more than £73,000 a year • Income Tax- a tax on the value of income earned by workers. Sole Trader owners must pay income tax on their earnings (profit) • National Insurance – a tax on the earnings of workers. Employee and employer contributions must be made. Sole trader owners have to pay a flat rate National Insurance contribution plus a percentage of net earnings • Corporation Tax- a tax on profits of limited (private and public) companies only

7. Tax for Businesses • Sole Traders (small businesses with 1 owner) Have to pay Income Tax and National Insurance payments • Limited Companies (Big Businesses with Shareholders) • Have to pay Corporation Tax only (pay income tax and national insurance on behalf of the workers only)

8. Keeping Records • Why should a business keep records? • What kind of information should a business record? • Why is that important? • What is the HMRC?

9. Keeping Records All businesses have to keep records e.g. Receipts and payments It is essential you keep records so you can prove you have paid the correct amount of tax HMR & C expect businesses to keep tax records

10. Rates of VAT • There are different VAT rates, depending on the goods or services that are being provided. Currently there are three rates: • standard rate 20 per cent • reduced rate 5 per cent • zero rate 0 per cent The standard rate of VAT is the default rate - this is the rate that's charged on most goods and services in the UK unless they're specifically identified as being reduced or zero-rated. • Examples of reduced-rated items • sanitary hygiene products • children's car seats Examples of zero-rated items • food - but not meals in restaurants or hot takeaways • books and newspapers • children's clothes and shoes • public transport

11. Plenary Table – fill in (own words)

12. Questions • What does a reduction in tax achieve? • What does an increase in tax achieve?