Taxation and Tax Environment in the United Kingdom Essay

Taxation and Tax Environment in the United Kingdom - Essay Example When a person is resident for tax purposes in the UK but he is a foreign domicile, he is perhaps only liable for paying tax on the money which has been brought in to the UK. So if a person offshore accounts in his own mother country, but he does not use that money in the UK, he has the chances to exempt from UK taxation but if in doubt he needs to check with an accountant. There are some sorts of income on which tax is not binding. These include certain benefits, special pensions, and income from tax-exempt accounts. These are ignored as well as when working out how much Income Tax may be needed to a taxpayer. HMRC is an association which is responsible for collecting the bulk of tax revenue, as well as paying Tax Credits and Child Benefits, and strengthening the UK's frontiers. It has a huge volume of information on these matters and it can get more as the individual banks are likely to follow suit. HMRC is also committed to targeting tax evasion. "Self Assessment" is the matter of personal taxation which is used in the UK regime. It is introduced in 1996/97. Self Assessment applies to such types of taxpayers who are self-employed. Their tax affairs are so complicated that can not be fully dealt with under the normal system. For example, we can say about the directors, higher rate taxpayers and those who have more than one source of income. The phrase "self-assessment" is ambiguous because the tax will be calculated by the HM Revenue and Customs in certain circumstances or the taxpayer can use the services of an accountant to calculate the tax on his behalf. The regular income-tax system involves the filing of a return of income with the Income-tax Department along with the statement of accounts maintained if any, production and examination of books of accounts, determination of total income, issue of a demand notice for payment of tax and finally its payment.