UK TAX SYSTEM

Taxation in the UK usually involves payments to:

- the central government agency called Her Majesty’s Revenue and Customs (HMRC or HM Revenue & Customs) and

- local councils.

Local councils collect a tax called business rates from businesses and council tax from households.

The largest source of revenue for the UK government is personal income tax. The second largest source arenational insurance contributions,the third value added tax (VAT) and the fourth largest is corporation tax.

In the United Kingdom as in ItalyWe have two kinds of taxes:

- DIRECT TAXES

- INDIRECT TAXES

DIRECT TAXES INCLUDE:

•Income tax•Corporation tax•Inheritance tax•Capital gains tax

INDIRECT TAXES INCLUDE:•Value added tax– V.A.T.•Stamp duty•Stamp duty land tax•Customs duty

INCOME TAX

A tax on the income of a person or business 

CORPORATION TAXCorporation tax is a corporate tax levied in the United Kingdom on the profits made by companies and on the profits of permanent establishments of non-UK resident companies and associations that trade in the European Union.

INHERITANCE TAXAn inheritance  tax is a tax paid by

a person who inherits money or property or a levy on the estate (money and property) of a person who has died.In the United Kingdom

, Inheritance Tax is a transfer tax. It was introduced with effect from 18 March 1986 replacing Capital Transfer Tax.

CAPITAL GAINS TAXA capital gains tax is a type of tax levied on capital gains incurred by individuals and corporations. Capital gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price.

VALUE ADDED TAX

STAMP DUTYIn the United Kingdom, stamp duty is a form of tax charged on instruments (that is, written documents), and historically required a physical stamp to be attached to or impressed upon the instrument in question. The more modern versions of the tax no longer require a physical stamp.

STAMP DUTY LAND TAXYou must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England, Wales and Northern Ireland.The current SDLT threshold is £125,000 for residential properties and £150,000 for non-residential land and properties.SDLT no longer applies in Scotland. Instead you pay Land and Buildings Transaction Tax when you buy a property.

CUSTOMS DUTYA tax levied on imports (and,

sometimes, on exports) by the customs authorities of a country to raise state revenue, and/or to protect domestic industries from more efficient or predatory competitors from abroad.Customs duty is based generally on the value of goods or upon the weight, dimensions, or some other criteria of the item (such as the size of the engine, in case of automobiles).