Tax for the Self-Employed

Posted by admin in Self EmploymentJan 9th, 2009 | Comments Off

If you work for yourself but do not employ other people then you are taxed as a self employed person rather than as a business. If either a part or the whole of your income comes from freelance work i.e. work that is contracted out as a service, rather than the more regular employment, then you have to register with the Inland Revenue as self employed. When you take this step you also have to inform the benefits and insurance section that you are now self-employed as this changes the amount of National Insurance payments that you will be required to make. If you are self employed then you may be required to make extra Insurance payments as you are not covered by company insurance if you are injured on the job.

In Britain National Insurance is also like another tax as it is people’s insurance payments that cover the basic costs of the National Health and of the Benefits system. When you pay tax as a self employed person you are still allowed to deduct the amount that is not taxable, which currently stands at around £5,000 a year, from the rest of your income, which is. Other than the very high earners, people pay twenty percent of whatever they earn over and above the annual limit.

Taxation Systems

Posted by admin in Taxation SystemsJan 1st, 2009 | Comments Off

In the contemporary world taxation is taken in money but in earlier times, taxation was taken in kind i.e. sheep, crops, cloth or precious stones. The subject of tax is highly controversial and many citizens think that those in power take too much tax and spend it on the wrong things, such as making war. Different countries have different taxation systems and different names for the office responsible for collecting tax. In the UK it is the Inland Revenue, in the US the IRS and in Canada the Canada Revenue Service.

Most taxation bodies have the power to take civil action against those people who do not pay their taxes. In some cases powers extend even further, as they do with the IRS and non-payers can face a jail sentence. Taxes fund things such as roads, law and order, public buildings, public transport systems and to some extent (particularly in the UK) schools and health services. Taxes also pay for public utilities such as waste management, energy and social and welfare services. Government ministers are paid via the taxation system and public bodies such as Department for Social Security and Work and Pensions are all funded, primarily by taxes.