Inland revenue and tax return
WHAT IS MEANT BY INLAND REVENUE AND TAX RETURN
There are many sources of government revenue like customs duty, excise duty, income tax revenue etc. It is out of this revenue collection only that a government makes different types of expenses . Grants, loans, and money from different types of development activities are also released out of this fund. Each company, business organization, individual has to file a tax return describing gross income from various sources. All the above activities are included in Inland Revenue and Tax Return . Let us try to understand more about Inland Revenue with reference to United Kingdom.
INLAND REVENUE IN UK
In United Kingdom, HM Revenue and Customs, also called as HMRC, is responsible for collecting different types of taxes. HMRC was formed in the year 2005 as a result of merger of HM Customs and Excise Department and Inland Revenue . Restructure programs are still continuing for smooth functioning of above source. The main responsibility of HMRC is to confirm that different constituents pay correct tax at appropriate time. This includes benefits paid by the organizations as well as taxes received by the department. HMRC is entrusted with the functions of collecting the taxes as well as administration of taxes. A great part of Inland Revenue collection is comprised by Direct Taxes . These taxes are paid on the income earned by business organizations, firms etc and individuals . In case of Capital gain also, Direct tax becomes payable .
Capital gain tax has been described as the tax levied on increase in the value of asset with time . For example, if a person has bought a land for 50000 pound sterling and after 3 years, he sells it for 80000 pound sterling, he is liable to pay tax on 30000 pound sterling. Other type of direct tax is Corporation Tax, which is payable by various corporations . Income Tax is the most common type of direct tax that is paid by an individual . Inheritance tax is also included in Direct tax and becomes applicable when property of deceased passes to legal heirs. National Insurance Contributions are also included in Direct Taxes . It is important for the reader to note that direct taxes are called so because they are applied at the time of income generation. For example, as soon as a person gets the salary, income tax at the specified rate is deducted from his income. The person receiving the benefits or compensation has to pay tax directly .
Other important source of Inland Revenue in United Kingdom is Indirect Taxes. This is a type of tax that is paid by a business unit or a person on the money spent on various types of goods and services.Excise Duty is one of important types of indirect tax and is levied on all the manufacturing units in the nation . There are different rates of excise duties pertaining to different types of items. Insurance premium tax is also included in Indirect taxes Other types of indirect taxes include Petroleum Revenue Tax, Stamp Duty, Stamp Duty Land Tax, Stamp Duty Reverse Tax, VAT etc . It is not that HMRC is associated with collection of taxes only . It is also entrusted with payment of different types of benefits that include Child Benefits, Child Trust Fund, Tax Credits etc . Thus, Inland Revenue is concerned with collection of all types of indirect and direct taxes and payment of different types of benefits.
TAX RETURNS
Tax Returns are the returns filed by a person, business organization, company etc that mentions the gross income, net income and the amount of tax paid. The tax returns are to be filed before a specified date, otherwise a person is required to pay penalty at the rate determined by the government . For filing tax return in an easy way, a person should never leave it for the last minute . For example, in United Kingdom, the last date for receiving the taxes determined by Inland Revenue is 31st January. If a person does not file the tax return for the previous tax year by this date, he has to pay penalty If a person wish that Inland Revenue calculates his tax for the year, the tax return has to be filed by 30th September . There are many types of documents that are required to be submitted along with the tax returns . These papers include PAYE coding Notices, interest and dividend certificates, P60, Pension contributions, Gift Aid Forms etc .
A person should check the tax return twice before filing because if tax return is submitted with checking for errors, there may be some problems faced by a person . For getting any type of information regarding tax return filing, a person can easily log on to the web site of Inland Revenue or can call the help desk at the number 0845 9000 444 . While filing tax returns, a person must be assured that contributions, donations etc have been treated in right manner. Signing the tax return is also very important. This is because if the tax return is not signed, it is treated as Incomplete Return .
In present times, tax return filing has even become easier due to the fact that a person can now file the tax return in United Kingdom on Internet. Internet filing of tax returns also guarantees correct tax calculation. For filing the tax return by means of Internet to Inland Revenue, a person requires to get registered to the site. After he is registered, a person is provided with User ID and PIN . When these are obtained, a person can easily go for the filing of tax returns online. Online filing of tax returns is also called as E-Filing .
It is advised here that for calculating and filing the tax returns in easy and quick manner, a person should utilize the services of tax firms. These are professional firms that can help a person in correct calculation of taxes. These sources also file return on behalf of their clients . In case of any discrepancy etc, these sources are also able to help a person in the required manner. There are many such private sources and finding them is exactly no problem .
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