Lecture 1- Introduction to the UK tax system

One objective of taxation is to [blank_start]manage economy[blank_end]. It includes [blank_start]employment levels[blank_end], [blank_start]inflation[blank_end], [blank_start]balance of payments[blank_end] & [blank_start]relationships[blank_end] with [blank_start]overseas trading partners[blank_end]. For example, this involves putting [blank_start]taxes[blank_end] in place in times of [blank_start]recession[blank_end]/doing [blank_start]poorly[blank_end] to encourage increased [blank_start]employment levels[blank_end]

Another objective of taxation is to provide [blank_start]public goods[blank_end]. These [blank_start]goods[blank_end] are provided for consumption that would unlikely be [blank_start]adequately[blank_end] provided by [blank_start]market[blank_end]. They have [blank_start]zero[blank_end] marginal cost, one individual cannot be [blank_start]excluded[blank_end] from benefiting & all [blank_start]members[blank_end] of society will consume the [blank_start]same[blank_end] amount

Third objective of taxation is [blank_start]developing society[blank_end]. This involves providing [blank_start]social welfare[blank_end] & [blank_start]health system[blank_end] to improve standards of living for [blank_start]whole society[blank_end]

Fourth objective of taxation is [blank_start]regulation[blank_end]. This involves protecting [blank_start]environment[blank_end], [blank_start]public[blank_end] generally or groups within [blank_start]society[blank_end] who might be exploited

Tax- Compulsory [blank_start]levy[blank_end] imposed by [blank_start]government[blank_end] or other [blank_start]tax[blank_end] raising body on income, expenditure, wealth or people for which [blank_start]taxpayer[blank_end] receives nothing specific in [blank_start]return[blank_end]

Direct tax- Tax which is [blank_start]levied[blank_end] on [blank_start]taxpayer[blank_end] who is intended to bear final [blank_start]burden[blank_end] of paying it i.e. [blank_start]income tax[blank_end], [blank_start]capital gains tax[blank_end], [blank_start]inheritance tax[blank_end], [blank_start]corporation tax[blank_end] & [blank_start]national insurance contributions[blank_end]

Indirect tax- Tax which is ultimately [blank_start]borne[blank_end] by someone other than [blank_start]taxpayer[blank_end] on whom it is [blank_start]levied[blank_end] i.e. [blank_start]VAT[blank_end], [blank_start]customs duties[blank_end] & [blank_start]excise duties[blank_end]