Taxation System of UK Essay Example | Topics and Well Written Essays - 2500 words

Taxation System of UK - Essay ExampleFinally the system of collecting levyes essential(prenominal) be efficient. For example if the government spends more in order to collect a given amount of appraise money it is useless having a system of gross. In the UK the cur mesh system of taxation has a number of shortcomings such as collective bias in favor of those who are able to pay and morphologic deficiencies at the deduction level.The British system of taxation is basically determined by a desire to act in con systemance with the age emeritus principles of taxation as enunciated by Adam Smith. In the first instance taxes must be fair or equitable secondly they must be satisfactory thirdly they must be neutral fourthly they must be efficient fifthly they must be simple and sixthly they must be adequate (Jones & Catanach, 2008). Yet how far these principles have been adhered to in the current situation in Britain is to be decided by each individual because on that point is much more to be desired in the British tax system with reference to the equity principle and the governments efforts to redistribute income on a nation-wide basis. fit in to the first maxim of Adam Smith as noted above every person should pay in proportion to that which is based on their individual revenue earnings and to the extent to which they enjoy protection of the government. Simply it is the ability to pay principle. Further he shows that tax should be levied on economic rent because the rent and the revenue were considered as synonyms in Smiths days. However according to the tax system revenue includes only income from an investment and it excludes wages and salaries. Thus in the18th carbon Britain most of the income was earned from landed properties. In the 21st century Britain where services have come to occupy a very important place, the old approaches to taxation might not be feasible though the fundamental principles remain intact. Secondly, tax payers must be certain abo ut the current and future periods of time. Moreover, it must be predictable and should not be arbitrary. Each person should be aware about the exact amount that he/she has to pay according to their earnings. They should whop reasons, exceptions/biases, and abatements when they are paying taxes. Government revenue budgets are either one year in duration or less (Ricardo, 2006). This affects businesses because they have to plan for somatic taxation a number of months, if not years, in advance. According to the third maxim, tax payment should be convenient to the tax payer. In fact the government should be flexible in the application of the tax rules. For example in demanding due payments, collecting payments and so on, tax authorities ought to identify more convenient ways so that the taxpayer isnt inconvenienced by way of haphazard schedules and rules as in the case of VAT financial penalty on late payers in Britain.Finally, tax system should be efficient with reference to its dete rmination cost and collection cost. Thus it ought to be as lower as possible. It is imperative that the cost of employing the tax officials should be less than the taxpayers personal cost. However the British government has to spend a considerable amount of money on such things as maintaining records and form filling to collect taxes from people.