Fiscal Policy

Explain how political factors affect business activity

This can include the effect of pressure groups or other political organisations for example; ASH is a pressure group which aims to eliminate the harm caused by tobacco. It might provide information on its website government to introduce legislations to limit the effect of smoking.

Politics, government, the tax environment will affect the business. For example, the tax environment will affect the business. For example, the tax environment will affect the price of goods (through VAT), investment (through cooperation tax) and the number of workers employed (through national insurance contributions and pensions legislation).

1.       Political stability- creating an environment that gives consumers and business a chance to thrive.

2.       Providing subsidy to starting businesses.

3.       The government’s role as a purchaser of goods providing for the population in times of recession etc

Fiscal Policy 

It’s based on how the government raises revenue (taxation) and how the government spends their revenue (expenditure)  

The main source of revenue for the government would be income and payroll tax which accounts for 80% of all income while 11% is represented by cooperate income tax.

The main source of expenditure for the government would be pensions in which the government will have to pay £156.9 billion in 2017. Expenditure in 2016 was £761.9 billion.

Cooperation tax can only be achieved when a business makes a profit. The main rate of cooperation tax is 20%

£11,200 has to earn to pay income tax. Highest rate of income tax is 45…