CHAPTER 1

INTRODUCTION TO
TAXATION AND UK TAX
SYSTEM
MSc. Nguyen Thuy Trang
Academy of Finance
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CONTENTS
1.1. Objectives of taxation
1.2. Liability to tax and tax administration
1.3. Source of tax law and practice
1.4. Tax avoidance, tax evasion and money
laundering
1.5. Ethics
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1.1. Objectives of
taxation
 1.1.1. Management of the 4

economy
1. Inflation
» Affect the level of economic activity Do cầu kéo và phí đẩy ( demand
pull- expense pushes)
» Control inflation, unemployment and the balance Tax policy- Increasing tax rate
2. Unemployment
of trade between imports and exports 4 stages
» Encourage or discourage certain types of economic + recession
+ Crisis
activity. Þ encourage: reducing,
incentive,
+ Recovery
+ Prosperity
=> Unbalancing
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1.1.2. Social justice

Direct impact on the accumulation and redistribution
of wealth within a country.
The main taxation principles as following:
- Direct/Indirect principle
- Progressive/Regressive principle
- Unit/Value principle
- Ability to pay/Benefit principle
- Neutrality principle
- Equity principle
- Efficiency principle
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1.1.3. Environmental concerns

» Climate change levy on businesses in proportion
to their energy consumption
» Landfill tax to discourage the use of landfill sites
for waste disposal and to encourage recycling
» Taxes on motor vehicles based on carbon
emissions
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1.1.4. Other influences

» Devolved taxes
» External influences
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1.2. Liability to tax

and tax administration
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1.2.1. Individuals
» Income tax (IT), Capital gains tax (CGT)- thuế
thặng dư về vốn, National insurance contributions
( bảo hiểm là một loại thuế ở anh)(NICs), Value
added tax (VAT)- thuế giá trị gia tăng đánh vào.
» Tax year (Income tax): (tínht huế ở anh bắt đầu từ
6/4/N kết thúc 5/4/N+1). 6 April in one calendar
year to 5 April in the next calendar year. For
example: 6/4/2022 – 5/4/2023 => 2022/23 tax
year.
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1.2.2. Partnerships
» A partnership is a group of persons carrying on
a business together with a view to making a NHóm các cá nhân đứng r

profit.
» Each partner is individually liable to tax on his
Họ phải chịu thuế như các
share of income and gains of the partnership in
Có them
a tax các phát sinh
year.
» IT of employees, NICs as an employer, VAT
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1.2.3. Companies
» A company is a legal person formed by
incorporation underthe Companies Acts. It is
legally separate from its owners (shareholders) Năm tínhh tuế DN
and its managers (directors). 1/4/n đến 31/3/N+1

» Corporation tax, NICs as an employer, VAT

» Financial year: 1 April in one calendar year to 31
March in the next calendar year. For example:
1/4/2022 – 31/3/2023 => Financial year (FY)
2022
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Chỉ là cơ quan hành phaps

Cơ quan quản lý ngân sách dưới dự quản lý của nhà vua
1.2.4. HMRC Vai trò: Thực hiện thu thu

» A body of civil servants appointed by the Queen

who exercise their duties on behalf of the Crown.
» Implement the law relating to taxation and
oversee the administration of taxation.
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1.3. Source of tax law

and practise
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Theo
1.3.1. Legislation
» Statutes and the Budget cycle
» Statutory instruments
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Luật do tòaquyeets định cái mà lé

1.3.2. Case law

Án lệ
Tax cases have been brought before the courts where
the interpretation of statute law is unclear.
Decisions made by judges to resolve these cases
form case law.
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1.3.3. HMRC publications

» Manuals, primarily for the guidance of its own
staff but also mostly available to taxpayers and
tax professionals on the HMRC website
» Statements of practice (SP) setting out HMRC's
interpretation of tax legislation
» Extra-statutory concessions (ESC) which provide
for a relaxation of the strict legal position to
resolve anomalies and relieve hardship
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1.3.3. HMRC publications

» Press releases and explanatory notes dealing with
changes in tax law
» Leaflets which are mainly aimed at ordinary
taxpayers and explain the tax system in non-
technical language
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1.4. Tax avoidance and

tax evasion
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Tax avoidance versus tax evasion

» Tax avoidance is legal
» Tax evasion is illegal.
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1.5. Ethics
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1.5.1. Fundamental principles

» Integrity: straightforward and honest in all
professional and business relationships.
» Objectivity: not allow bias, conflict of interest or
the undue influence of others to override
professional or business judgements.
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Fundamental principles
» Professional competence and due care:
maintain professtional knowledge and skill at the
level required to ensure that a client of employer
receives competent professional service
» Confidentiality: not disclose such information
without proper and specific authority unless there
is legal or professtional right or duty to disclose
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Fundamental principles
» Professional behaviour: complying with
relevant laws and regulations and avoid any
action that discredits the profession.
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1.5.2. Threats and safeguards

framework
» Threats:
- Self-interest threats
- Self-review threats
- Advocacy threats
- Familiarity threats
- Intimidation threats
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Threats and safeguards framework

» Safeguards framework
- Educational, training and experience requirements
- Continuing professional development requirements
- Corporate governance regulations
- Professional standards
- Professional or regulatory monitoring and disciplinary
procedures
- External review
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1.5.3. Ethical conflict resolution

» Conflict resolution process
- Relevant facts
- Relevant parties
- Ethical issues involved
- Fundamental principles related
- Established internal procedures
- Alternative courses of action
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THE END