Comparison of Taxation in the UK and Bangladesh

Comparison of Taxation in the UK and BangladeshIntroductionTaxation It is c erstwhilerned with the customs duty of a countries regimen acquiring monetary fund from its countries populace in order for them to fund their familiar services. 1For instance, revenue enhancement is used to build and maintain its public roads, public libraries, parks etc. Taxation is also used to support the countries security services like the police, army, etc.Task 1Taxation plays a crucial role for countries through let out worldwide. However, here we ar going to discuss brief descriptions of Taxation in United earth (U.K.) and Taxation in Bangladesh.UK has a rather elaborate tax environment and it has several types of taxes, function and purpose, revenue law and practices. They are described below.Function and Purpose of Taxation in new-fangled Economy in UKGovernments tax policies in the UK are affected by the following factorsEconomic cyphersSocial Factorsenvironmental FactorsEconomic Factors unclutter position in connection with taxation and expenditure of the government, on with the borrowing protocol of its public sector has an influence upon the UKs level of economic activities.Countries government generally prefers long-term planning which illustrates the capacity of the total resources of the economy which the government give allocate and the amount be given for the private sectors.Demand for particularised kinds of goods depart be influenced. Different sectors level of employment along with different private sector suppliers profitability will be influenced by the changes in the demand level.Tax policies are used by the government in order to inspire and demoralize specific kinds of activities.Government believes that the latter taxes and duties beam the additional costs for the entire country. Nonetheless, Government requires increasing fund in order to invest in particular area where there arent any consumers upon which the essential taxes can be subjected to tax like defense, law and order, overseas aid and also the expenditure required for operating the Government and Parliament.Social FactorIt is usually considered by whatsoever as a Fair way to go more or less, while on the other(a) hand other may theorise of it as an en masse Unfair way to do things.For instance, some particular people in the free market are able to rag much larger quantity of income and capital in comparison to other people. Finally whenever the wealth is amassed it only leads to the growth of that wealth through the means of re coronations of investment income that they gained. This ultimately ends up in the rich amassing more wealth and the poor getting even poorer, which leads to the economic scale organism out of balance nitty-gritty that economic power mainly focused in the hands of few individuals.Taxation policies are there to counteract the problem of economic scale being out of balance, which prevents the rich from getting richer and the poor fro m getting poorer.There are different taxes which influences society.Within Direct Tax and Indirect Tax many types of taxes reflect under the categories.Different point of view remains about equitable even though nearly eitherone agrees that taxation ought to be equitable or fair.Environmental FactorsThe movement of taxation formation is relatively slow regarding the environmental concerns accommodation, especially in the areas of renewable and non-renewable energy sources and also global warming.However, changes in the taxation system of rules have been introduced in order to accommodate the environmental concerns.Only the effects of the 3rd point will be directly be felt by ordinary people, while the others are going to be felt by those in charge of the business.Overall structure of the United Kingdom (U.K.) tax system and Sources of Revenue Law and Practice are mainly superintended by the HMRC (Her Majestys Revenue and customs).Overall structure of the U.K. tax systemTaxation collections are formally enforce by the Treasury. Responsibility of administration of the Treasury falls under the Chancellor of the Exchequer. The role of governing for collecting tax is initiated by HMRC (Her Majestys Revenue and Customs).Officers of the Revenue and Customs are made k directlyn in the tax law as the someonenel of the HMRC. Fundamentally, they are the ones duty-bound for overseeing the system of self-appraisal and acknowledging liabilities of taxation. Receivable prudence Officers are those officers who are responsible for collecting tax. They are provincial civil servants who are answerable for investigating number of taxes which are left unpaid contract to them by the HMRC Accounts Office.Crown Prosecution Service (CPS) They give legitimate consultation and doctrine and also handles prosecutions of criminals which has been analyzed by the HMRC (Her Majestys Revenue and Customs).Tax appeals are noted by the Tax Tribunal which is comprised of 2 tiers.Sources o f Revenue LawGenerally, decree imposes the taxes. Statutory Instruments ordains the etiquette as closely as Acts of Parliament. Decree is made separate and augmented by case law.HMRC (Her Majestys Revenue and Customs) are also responsible for imposing the following points.HMRC publications doesnt have the force of law, but few of the tubful briefings does wherever authority have been designated subsidiary to constitution.United Kingdom (U.K.) tax system interacts with that of European Union (E.U.) as well as other countries.European Union (E.U.)Its members has a major influence on U.K. taxes, even though there arent any prerequisite enforced upon its raises (e.g., members of the E.U.) to step towards the typical taxation system or to coordinate their own unique system of tax. Directives which are specific laws will be agreed by the states to enact which give for a familiar taxation code within distinct field of their own systems of taxation.Value Added Tax (V.A.T) is without a d oubt the most significant reference currently up-to-date. U.K. is duty-bound to accommodate its legislation in accordance with the guideline set forth in the E.U. mandate. Directives of Value Added Tax (V.A.T) will accept some laissez faire amongst its state members (e.g. set up taxation rates). There are only a handful of illustrations of Directives in the field of Direct Taxes. Its main interest in the subject will be associated with cross-border dividend, interest payments and also corporate reorganizations.Nonetheless, being influenced by the provisions of the treaties of E.U., those states who are member must allow of privilege of transferal of workforce, wealth, as well as, the right to set-up mtier anywhere interior of the boundaries of the E.U. These accord arrangements have a direct effect.European Justice Court consistently pointed out that the policy of tax which victimizes non-residents is contradictory to the laws of European Union (E.U.), except in cases where there is powerful rationale regarding interest of the public.Other CountriesUnited States of America (U.S.A.) along with several other countries has a treaty with the United Kingdom (U.K.) which is known as the Double Tax Treaty. Incorporated within this decree are regulations which thwart earnings and benefits being taxed not just once but twice. Also, included within this decree, the law which forbids nationals from foreign countries from being discriminated (e.g. treating nationals with benevolence, while on the other hand treating the non-residents with prejudice). Additionally, statute exists which allows different Revenue administration to share intelligence.The system of taxation of U.K. grants alleviation for taxes which are paid in foreign countries, even though there is no double tax relief.Task 2Tax Practitioner They are the people who are being paid to prepare taxes every year.12Tax Practitioner has several responsibilities and critical obligations.Task 3As, Mr. Abids tax lawy er one can give couple of recommendations regarding his entitlement, exemptions and obligations for taxation in the United Kingdom (U.K.) tax environment.First and foremost, Mr. Abid isnt currently a resident of United Kingdom (U.K.). However, his wife Mrs. Narida is an United Kingdom (U.K.) resident living(a) in the United Kingdom (U.K.) currently. Mrs. Narida has accessories business in the United Kingdom (U.K.) and she is also helping her husband (i.e. Mr. Abid) business of selling accessories in the United Kingdom (U.K.) as his proxy.Here, currently he is obligated to pay income tax and also corporate tax in two the countries due to the provision known as Double Tax Treaty due to the fact that he is not a resident of the United Kingdom (U.K.) as of yet. And for this instance, he wont get an exemption on income and gains however, he would have gotten some exemptions if he was a resident of the United Kingdom (U.K.), but doing business outside the country.It would be much easie r for him to become a resident of United Kingdom (U.K.) be endeavor his wife is currently a resident of United Kingdom (U.K.). Once he becomes a resident of the United Kingdom (U.K.), he is required to be present in the country of United Kingdom (U.K.) for at least half-a-year/ or about six months (approximately 183 Days) or more. But, if he were to make commodious annual visit to the United Kingdom (U.K.) like for a time length of approximately 91 Days or more in a year for 4 or more perpetual years then he will be considered as a resident of the country of United Kingdom (U.K.), and will be entitled to pay taxes according to the rules and regulations of United Kingdom (U.K.) tax system.Again, once Mr. Abid is a resident of the country of United Kingdom (U.K.), he is also entitled to pay Council Tax. His wife Mrs. Narida lives in a rented house with his mother whose progress is around 70 Years. And so, when he becomes a United Kingdom (U.K.) resident, he may get an exemption on hi s Council Tax, based upon the fact that an aged person is also living with them. It is generally, better for large number of people to live together because depending on the size and type of people living in the position can be a powerful rationale for exemption like single person, or people living with children under the age of 18, or the alter and pensioners are entitled to exemptions.Next would be Inheritance Tax. Mr. Abid, 8 years in the past got a house as a wedding endue which was worth more than 310,000. Mr. Abid inherited it from his wife. So, he has to pay Inheritance Tax. He may have gotten so exemptions but due to the fact he isnt a resident of the country of United Kingdom (U.K.), he is not going to get any kind of tax exemption.Next is Capital Gains Tax. Mr. Abid will also have to pay Capital Gains Tax, once he sells the house which was given to him as a wedding present by his wife Mrs. Narida.And now finally we come to Value Added Tax (V.A.T.). Value Added Tax (V.A .T.) is a system of taxation which is internationally practiced. So, no matter which country he/she is staying in they all have to pay Value Added Tax (V.A.T.) which also includes the country of United Kingdom (U.K.).Case 2Tax Non-Compliance is mainly comprised of Tax outflow and Tax Avoidance.Generally, the distinction between Tax Evasion and Tax Avoidance is rather vague to say the least however, there are some differentiations between them.Here, in Case 2, at first Tanzila received property income of 5,000 but accidently entered the figure on her tax return as 500. While on the other hand, Mitu received property income of 7,000 and deliberately declared 5,000 on her tax return.In both these cases, both of them have misled HMRC (Her Majestys Revenue and Customs) by providing wrong teaching. So, they both committed the crime of Tax Evasion. However, there is a subtle difference between them.In Tanzilas case, while she did provide misleading information to the HMRC, she did no t do so purposely she entered the information wrong by accident. She didnt mean to give the wrong information deliberately. And so, this will be tough as minor case of Tax Evasion and will be dealt out of count on the payment of penalties. Because, there is no need to cause too much trouble for such unintentional mistakes.While on the other hand, Mitu deliberately provided HMRC with false information. So, unlike Tanzilas case this cannot be hardened as case of minor human error. Here, she intentionally trying to evade tax which is a serious crime of Tax Evasion, As such, Mitu will be subjected to criminal prosecutions, which might ultimately end up in her having to pay fines and/or imprisonment on conviction.1 http//www.vocabulary.com/dictionary/taxation2 http//en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom3 http//en.wikipedia.org/wiki/Taxation_in_Bangladesh4 http//www.investopedia.com/terms/d/directtax.asp5 http//www.investopedia.com/terms/i/indirecttax.asp6 http//www.inves topedia.com/terms/i/incometax.asp7 http//www.investopedia.com/terms/c/corporatetax.asp8 http//www.investopedia.com/terms/i/inheritancetax.asp9 http//www.investopedia.com/terms/c/capital_gains_tax.asp10 http//www.thefreedictionary.com/council+tax11 http//www.investopedia.com/terms/v/valueaddedtax.asp12 https//answers.yahoo.com/question/ tycoon?qid=20101127121537AAXMjCR13 http//www.enotes.com/homework-help/what-roles-responsibilities-tax-practitioner-44176514 http//en.wikiquote.org/wiki/Tax_noncompliance15 http//www.investopedia.com/terms/t/taxevasion.asp16 http//www.investopedia.com/terms/t/tax_avoidance.asp17 http//www.nouse.co.uk/2013/01/22/what-is-the-difference-between-tax-evasion-and-tax-avoidance/