Compare/Contrast the Tax Systems and Tax Expenditure of the Uk, Usa and Australia
A tax system is simply the collection of taxes in an economy. It is a sum of money paid by people or businesses to a government, to be used for public purposes. Taxes are raised through various means and the systems vary for each country. The main taxes in the UK, USA and Australia will be explained. Countries use the taxes they receive in different ways. Aims and targets of most countries vary, as does the amount of tax generated. Due to this, expenditure is prioritised and spent accordingly. Government expenditure will therefore also be discussed.
The UK Tax system
In the UK taxes are collected for a variety of reasons. A wide variety of methods are used to raise the different taxes. The UK government uses taxes to manage the economy, health, education, providing public goods, influencing behaviour (e.g. tax on alcohol and petrol) and a host of other things. The modern tax system has changed since the middle ages and medieval times. The tax year starts on the 6th April and ends on the 5th April. The tax administrator is called Her Majesty’s Revenue & Customs (HMRC). This body focuses on tax policy maintenance and delivery for both customs and revenue services. Before 2005 there were two bodies (Inland Revenue and H.M. Customs), which have now merged into HMRC. The revenue authority has the responsibility of collecting taxes from the taxpayers. However, in some cases the self-assessment system is used. Here the taxpayer is responsible for working out their tax. This is then reported to HMRC either by paper or electronically. Company directors and self-employed people are two examples of people who fall into the self-assessment tax system. In 1944 the PAYE (pay-as-you-earn) system was introduced. Tax is deducted from taxpayers’ wages before they receive it. This could favour the employee and the government. The taxpayer does not need to work out and send the tax themselves saving time and hassle. The government’s cash flow will be
The UK Tax system
In the UK taxes are collected for a variety of reasons. A wide variety of methods are used to raise the different taxes. The UK government uses taxes to manage the economy, health, education, providing public goods, influencing behaviour (e.g. tax on alcohol and petrol) and a host of other things. The modern tax system has changed since the middle ages and medieval times. The tax year starts on the 6th April and ends on the 5th April. The tax administrator is called Her Majesty’s Revenue & Customs (HMRC). This body focuses on tax policy maintenance and delivery for both customs and revenue services. Before 2005 there were two bodies (Inland Revenue and H.M. Customs), which have now merged into HMRC. The revenue authority has the responsibility of collecting taxes from the taxpayers. However, in some cases the self-assessment system is used. Here the taxpayer is responsible for working out their tax. This is then reported to HMRC either by paper or electronically. Company directors and self-employed people are two examples of people who fall into the self-assessment tax system. In 1944 the PAYE (pay-as-you-earn) system was introduced. Tax is deducted from taxpayers’ wages before they receive it. This could favour the employee and the government. The taxpayer does not need to work out and send the tax themselves saving time and hassle. The government’s cash flow will be
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