Posted: January 19th, 2015

Taxation

Taxation

Project description
IT NEEDS TO BE DONE BEFORE 12.30 HOURS TOMORROW, PLEASE.
Assignment task(s)

Case Study

Sally Forth lives in the UK and is a marketing manager for a large corporation. Unfortunately, the company she works for has asked for members of staff to volunteer

for redundancy in a re-structuring programme. Should she volunteer, Sally would receive a 50,000 lump sum from her employer. Sally would then use the money to start

her own business as a marketing consultant. She has a lot of contacts in the industry and believes that she could build a successful business, although this might take

several years. One of her concerns is what might happen if she were to secure a job with another company. Another is what would happen if she wanted to sell the

business or just cease trading in the future.

What she is not very sure of is the UK taxation implication of starting her own business. Friends have said that she may have to register with Companies House and that

as long as she does everything in cash, she will not have to worry about VAT or any other taxes. Another friend has said that if Sally starts a limited company, she

will not pay tax, as the company will pay it for her, but, she may have to pay National Insurance.

Assignment briefing

Required

Prepare a comprehensive written report, in Microsoft Word, for Sally Forth that addresses the personal taxation consequences of her commencing self-employment as well

as the general taxation principles and considerations involved with her running a business and its subsequent development over time. This will include aspects of

Capital Gains, Inheritance and Corporation tax as they may apply to Sally in the future should she wish to dispose of her business. Your report must include the

subjects of National Insurance and VAT and how they will impact in this instance. The administration and penalty regime for relevant taxes must also be examined.

Wherever possible, your discussion should include worked examples to illustrate principles, offer guidance and inform decision-making.

You will be expected to review and research the appropriate chapters in the Set Text, on-line sources and review other texts & journals in the Hive library to develop

your lecture/seminar knowledge and understanding.

Learning Outcomes

1.Explain and appreciate the scope, operation and administration of the tax system as it applies to
– individuals
– and companies.

5.Investigate the VAT system and make decisions regarding registration for individuals and companies.

6.Understand how National Insurance complements the Income tax system and perform calculations for
individuals and companies.

Assessment Criteria
The following specific criteria will be used for this work:
1.Demonstration an understanding of the scope, operation and administration of the tax system and how it applies to – individuals (175 marks)
– and companies (65 marks)

2.Advise how VAT will impact the business or individual (30 marks)

3.Understand how the National Insurance system complements the Income Tax system and demonstrate this with examples (30 marks)
Grading Matrix: This matrix captures the assessment criteria for this part of the coursework.
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Added on 18.01.2015 10:19
References:
Essencial: Melville, A Taxation Finance Act 2013
(19th Edition published summer 2014)
Pearson Education
And https://www.gov.uk/government/organisations/hm-revenue-customs

oFurther Reading ACCA (2013) Paper F6 Taxation 2013 BPP (Latest Edition)
oJournals:
-Accountancy (ICAEW)
-Accountancy Age
oWebsites:
www.tax.org.uk

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