GCSE Business Studies - Taxes on Small Businesses 0.0 / 5 ? Business StudiesTaxGCSENone Created by: nevexwhinnCreated on: 03-04-17 11:23 What does VAT stand for? Value Added Tax. 1 of 17 What is VAT? A tax on the value of sales. 2 of 17 Do all firms have to pay VAT? Yes. 3 of 17 When does a small business have to pay VAT? If their sales are more than £82,000 a year. 4 of 17 What do firms do when they have to pay VAT? They add 20% on to their prices, so theoretically pass this tax on to consumers to pay. 5 of 17 What is the VAT rate in the UK? 20%. 6 of 17 Who pays income tax? Sole traders must pay income tax on their business earnings. 7 of 17 What are business earnings? The difference between the sales revenue and the costs. 8 of 17 Why do sole traders have to pay income tax? Because as a sole trader, they are not legally separate from the business. 9 of 17 What do sole traders or private limited companies have to do if they employ any workers? They will have to take income tax out of their employees wages and pass this directly on to HMR&C. 10 of 17 What does HMR&C stand for? Her Majesty's Revenue and Customs. 11 of 17 What does NIC stand for? Natural Insurance Contribution. 12 of 17 What do employers pay NICs for? For each employee they have working for them. 13 of 17 What do employers deduct NICs from? Their employees wages and pass this directly on to the HRM&C. 14 of 17 Other than employers, who must pay NICs? Sole Traders must pay NICs on their earnings. 15 of 17 What is corporation tax? A tax on profits. 16 of 17 Who pays corporation tax? This is only paid by limited companies 17 of 17
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