Tax Avoidance

  1. ‘Governments raise taxation simply to fund public expenditure’. Discuss this statement in the light of what you know of the objectives of taxation
  2. Discuss the development of capital gains tax since its introduction into the UK in 1965.

  3. Adam Smith proposed four ‘Canons’ outlining how a ‘good’ tax system should be designed. Describe each of the four canons and illustrate how the current UK tax system shows evidence of their use in practice.
  4. Outline briefly the key ways in which corporate taxation computations differ from personal tax computations for trading income.
  5. Why does HMRC differentiate between trading and non-trading activities for tax purposes? What is the outcome for tax payers of being allocated in one or other of these categories?
  6. Why is equity considered to be an important characteristic of a tax system? In practice, how can a government generate equity in a tax system?
  7. Briefly describe what, according to Adam Smith, are the desirable characteristics of a good tax system
  8. A) Outline how the Meade Committee Report (1978) justified the continuing existence of a separate company taxation system for the UK  
      a. B) Describe and explain the nature of, and differences between, a classical and imputation based company tax system. Include in your answer details of how the problems with each system are typically overcome in countries using each type of system.
  9. Why are benefits in kind taxed? Illustrate your answer with examples of FIVE different taxable benefits in kind. Explain how each is taxed and why this is considered to be an appropriate way to assess it for tax purposes.