Flashcards
Flash Cards
Flashcards do conjunto (76)
- 1Topic 12 - Financial Studies...
- 2Why has legislation / regulation about minimum wage and maximum working hours been introduced?to protect employees who may have been exploited by the employers
- 3What do people who work have to pay?- income tax
- national insurance contribution - 4What do the government use tax and NI contributions for?- National Health Service (NHS)
- Education
- Police
- Defence
- State pension
- Benefits for unemployed - 5Other than earnings from work, what is income tax paid for?- interest on savings
- dividends - 6Who sets the amount of tax and NI contribution?Chancellor of the Exchequer
- 7How often is the amount of tax / NI changed?every tax year
- 8When does the tax year run?From 6th of April to the 5th of April in the following year
- 9What happens to people who work or receive income from unearned sources if they pay too little NI / taxpenalties like:
- fines
extreme cases:
- prison sentences - 10What happens if someone pays too much tax / NIThey can claim additional amounts back
- 11What is a tax rebate?when somebody pays too much for NI / tax and they can claim those additional amounts back
- 12What act introduced the national minimum wage? (NMW)National Minimum Wage Act 1998
- 13What function does the low pay commission do?advises the government what the minimum wage should be each year
- 14What is the national minimum wage expressed as?per hour
- 15What dates does the NMW apply to?1st October - 30th September in the following year
- 16What age does a person have to be to get minimum wage?school leaving age defined as 'the last Friday of June in the school year when they had their 16th birthday
- 17What is the NMW for someone 25+£7.20
- 18What is the NMW for someone aged 21-24£6.95
- 19What is the NMW for someone aged 18-20£5.50
- 20What is the NMW for someone under 18£4.00
- 21What is the NMW for apprentices under 19 or in the first year£3.40
- 22Are contracts that specify a wage below the minimum wage legally binding?No
- 23What exceptions are there to the NMW?- voluntary work
- people on work experience (interns)
- trainees on government schemes
- prisoners
- members of the armed forces - 24What can workers entitled to minimum wage that aren't receiving it do?- examine employees records and claim missing wages
- take employers to industrial tribunal - 25What does the government offer to workers who are in dispute with their employerConfidential Helpline
- 26Are people on a zero hour contract entitled to NMW?Yes
- 27When are people on zero hour contract entitled to the NMWWhen they come on call at the employers premises
- 28Is it illegal for employers to not pay the NMW when workers on zero hour contracts are working on siteNo it is illegal, they must pay them the NMW
- 29In what year was the Working Time Regulations introduced?1998
- 30What did the Working Time Regulations 1998 specify?- work max 48 hours pw (17 weeks unless chose otherwise)
- 5 days = 5.6 weeks' paid holiday per year (bank holiday can be included up to employee)
- 3 days = 16.8 days per annum
- entitled to at least 11 consecutive hours' rest in 24 hour period
- when longer than 6 hours entitled to minimum 20 min rest
- entitled to at least one day off each week - 31Who do the regulations not apply to?- armed forces
- emergency services
- domestic workers in private households e.g. nannies
- when 24 hours staffing required - 32Where is the working hours, annual leave and rest period set out?Employees Contract of Employment
- 33When do people have to pay income tax and NI contribution?when they earn more than the minimum person allowance (11,000)
- 34What determines whether a person pays income tax?the amount of money they earn
- 35When was the income tax introduced and why?in 1799 to raise money to fight napoleon
- 36Which is the most recent income tax act?Income Tax Act 2007
- 37What is personal allowance and who does it apply to?a certain amount of money that people can earn before they pay income tax and it applies to most people
- 38Exceptions to personal allowance- people born before 6 April 1938
- blind people
- married couples where one partner was born before April 1935 - 39How to calculate how much income tax a person owes- subtract personal allowance from gross annual income = taxable income
- work of which tax band applies to taxable income
- calculate using tax rates from each band - 40What are the income tax rate bands?20% = £0-£32k
40% = £32k-£150k
45% = 150k+ - 41What personal savings allowance did the government introduce?£1,000 for basic-rate tax payers
£500 for higher-rate tax payers - 42What else do you need to pay income tax on?savings account
- 43When don't people pay income tax on savings interest?when taxable income is less than £5,000
- 44Do basic-rate taxpayers have a personal savings allowance?Yes of £1,000
- 45What is the higher-rate taxpayers personal savings allowance?£500
- 46What are Individual Savings Accounts? (ISAs)Tax-free accounts, so interest earned on a cash ISA is paid to savers in full and they do not owe any income tax on it, regardless of how much they earn elsewhere
- 47Who pays NI contributions- between 16 - state pension age
- earning more than £155 per week
- self-employed & making profit over £5,965 - 48Are young apprentices required to pay NI contributions?no
- 49When do you get NI number?16
- 50How does the number of years a person has paid NI impact state benefits they can getJobseekers Allowance
Maternity Allowance
Bereavement Benefits - 51How many years do you have to pay NI to be eligible for full state pension?30 years
- 52Who does this disadvantage?- carers
- self-employed (low income) - 53In a new state pension how many years do people have to pay ni contributions?10
- 54How much state pension is received per week?At least £148.40
- 55What are the class 1, 2 and 4 contributionsClass 1: 12% between £155-£815 and 2% on earnings over £827 per week
Self-employed:
Class 2: flat rate of 2.80 per week
Class 4: 9% on annual taxable profits between £8060 and £43,000 and 2% on profits above that - 56Who are NI contributions and Income Tax paid to?Her Majesty's Revenue and Customs (HMRC)
- 57How are they paid to HMRC?through Pay As You Earn (PAYE) scheme
- 58How do self-employed pay NI and Income Tax?Themselves, through a system called self-assessment
- 59What does the self-assessment involve?completing income tax forms called tax returns, every year once a year. They pay the flat rate Class 2 contributions throughout the year (often direct debit)
- 60Under what Act must employers provide employees with details about income tax and NI paid on wages?Employment Rights Act 1996
- 61What are the three documents involved in PAYE?- Payslip
- p60 (shows how much tax and NI was deducted from annual salary)
- p45 (when employee leaves, details for their new employer) - 62What does a payslip show?earnings before and after deductions
shows how wages are paid - 63How are payslips provided?paper or electronically. Most use payroll software to generate them
- 64How do employers work out how much tax to deduct from employees earnings?Tax Code: which shows individuals personal allowance and is provided by HMRC
- 65What is the format of a payslip? What is a common tax code?3 numbers and 1 letter
1060L - 66When does an employer have to issue a P60?at the end of the tax year on the 5th of April
- 67What is the P60?It summaries the tax paid by the employer for the tax year that just ended. It is provided on paper or electronically
- 68What do employees use P60 for?to prove how much they earned and how much tax and NI was deducted from their salary
- 69What might they need a p60 for?- to complete a self-assessment tax return
- claim back overpaid income tax or NI contributions
- apply for tax credits
- apply for a loan or a mortgage - 70Why should people fill in an income tax return?to tell HMRC about their earned and unearned income?
- 71What does a tax return cover and how can it be completed?income received in one tax year and it can be completed on paper or online at HMRC online services website
- 72Who calculates tax returns?HMRC
- 73What are the deadlines for when HMRC must receive a completed tax return- paper tax returns must be received at midnight on the following 31 October
- Online tax returns must be received by midnight on the following 31 January
- The final payment of tax due must be received by midnight on 31 January - 74What are the penalties for missing the deadline for submitting a completed tax return?One day late: fixed penalty £100.
Three Months Late: £10 for each following day up to a 90 day maximum of £900
6-12 months: £300 or 5% tax due (whichever higher)
12 months: serious up to 100% tax due, as well as £1,000 - 75How long should people keep their records?at least 22 months after end of the year tax
- 76What must self-employed people do?as well as completing tax returns and paying what they owe on time, they need to make payments of income tax 'out account' meaning they make advance payments of tax they owe for the next tax return on 31 Jan and 31 July