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The truth of the matter is that there are so many different types of taxes that exist in he United Kingdom. All these different types of taxes are meant to execute different functions, apart from the obvious function of collecting revenue. Some of these taxes that are found in the UK are also found in other countries. At the same time, it is also important to realize that there are some taxes that are found in the UK, that are actually not found in many other tax stems outside there. In this article, we are going to look at some of the most common and the most “standard” types of taxation.

We have the following types of tax that we are going to look at in this article: the income tax, the corporate tax, the Value Added Tax, and the Inheritance tax.

Of all the taxes that are paid to the HMRC, the income tax is the one that is best known by many people. This is perhaps because of the fact that the amount is normally deducted from the pay slip and hence people can see the amount disappearing over their very own eyes.

The corporate tax is the tax that is paid by corporations that are considered to be separate legal entities from the owners. This amount is normally a flat tax rate and is based on the amount of net profits that a company has earned. It is also important to remember that the tax system also allows for “negative tax.” Here, if the company did get some losses, the amount of “tax” that they are supposed to pay on a loan, is offset against future tax obligations. This ensures that corporations get some time to recover after years of making losses.

Apart from the income tax and the corporate tax, there is also the issue of the value added tax. This tax is an indirect that is put on commodities. Unlike the income and the corporate taxes, the value added taxes are indirect taxes. There is also the inheritance tax whose purpose is to ensure that you do pay for any monies that you will receive as inheritance. A lot of people do find thi to be extremely controversial, because of the fact that the tax does not in anyway focus on production or consumption, but instead focuses on the exchange of property, something that is not a contributor to GDP.

Source: http://www.articlesbase.com/finance-articles/a-look-at-the-different-tax-types-in-the-united-kingdom-5564665.html

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