The Eady Levy was a tax on box-office receipts in the United Kingdom, intended to support the British film industry . It was introduced in 1950 as a voluntary levy as part of the Eady plan , named after Sir Wilfred Eady , a Treasury official. The levy, paid into the British Film Production Fund , was made compulsory in 1957 and terminated in 1985.
91-535: A levy was first proposed by Harold Wilson , then president of the Board of Trade , in 1949. The levy was intended to assist producers of British films . A direct governmental payment to British-based producers would have qualified as a subsidy under the terms of the General Agreement on Tariffs and Trade , and would have led to objections from American film producers. An indirect levy did not qualify as
182-433: A pay-as-you-earn basis, with corrections made after the end of the tax year . These corrections take one of two forms: Income-tax systems often make deductions available that reduce the total tax liability by reducing total taxable income. They may allow losses from one type of income to count against another – for example, a loss on the stock market may be deducted against taxes paid on wages. Other tax systems may isolate
273-426: A certain area ( social engineering ). For example, a high excise is used to discourage alcohol consumption, relative to other goods. This may be combined with hypothecation if the proceeds are then used to pay for the costs of treating illness caused by alcohol use disorder . Similar taxes may exist on tobacco , pornography , marijuana etc., and they may be collectively referred to as " sin taxes ". A carbon tax
364-446: A commodity is sold to its final consumer. Retail organizations contend that such taxes discourage retail sales. The question of whether they are generally progressive or regressive is a subject of much current debate. People with higher incomes spend a lower proportion of them, so a flat-rate sales tax will tend to be regressive. It is therefore common to exempt food, utilities, and other necessities from sales taxes, since poor people spend
455-469: A definition and system of classification of internal taxes, generally followed below. In addition, many countries impose taxes ( tariffs ) on the import of goods. Many jurisdictions tax the income of individuals and of business entities , including corporations . Generally, the authorities impose a tax on net profits from a business , on net gains, and on other income. Computation of income subject to tax may be determined under accounting principles used in
546-574: A greater or lesser degree (for instance Chancellor of the Duchy of Lancaster or Lord Privy Seal ). The government is sometimes referred to by the metonym " Westminster " or " Whitehall ", as many of its offices are situated there. These metonyms are used especially by members of the Scottish Government , Welsh Government and Northern Ireland Executive to differentiate their government from His Majesty's Government. The United Kingdom
637-406: A higher proportion of their incomes on these commodities, so such exemptions make the tax more progressive. This is the classic "You pay for what you spend" tax, as only those who spend money on non-exempt (i.e. luxury) items pay the tax. A small number of U.S. states rely entirely on sales taxes for state revenue, as those states do not levy a state income tax. Such states tend to have a moderate to
728-641: A higher tax rate. Historically, in many countries, a contract needs to have a stamp affixed to make it valid. The charge for the stamp is either a fixed amount or a percentage of the value of the transaction. In most countries, the stamp has been abolished but stamp duty remains. Stamp duty is levied in the UK on the purchase of shares and securities, the issue of bearer instruments, and certain partnership transactions. Its modern derivatives, stamp duty reserve tax and stamp duty land tax , are respectively charged on transactions involving securities and land. Stamp duty has
819-497: A large amount of tourism or inter-state travel that occurs within their borders, allowing the state to benefit from taxes from people the state would otherwise not tax. In this way, the state is able to reduce the tax burden on its citizens. The U.S. states that do not levy a state income tax are Alaska, Tennessee, Florida, Nevada, South Dakota, Texas, Washington state, and Wyoming. Additionally, New Hampshire and Tennessee levy state income taxes only on dividends and interest income. Of
910-419: A mandatory financial charge or levy imposed on a taxpayer (an individual or legal entity ) by a governmental organization to support government spending and public expenditures collectively or to regulate and reduce negative externalities . Tax compliance refers to policy actions and individual behavior aimed at ensuring that taxpayers are paying the right amount of tax at the right time and securing
1001-482: A member of either House of Parliament. In practice, however, the convention is that ministers must be members of either the House of Commons or the House of Lords to be accountable to Parliament. From time to time, prime ministers appoint non-parliamentarians as ministers. In recent years such ministers have been appointed to the House of Lords. The government is required by convention and for practical reasons to maintain
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#17327719413711092-412: A new House of Commons, unless the prime minister advises the monarch to dissolve Parliament , in which case an election may be held sooner. After an election, the monarch selects as prime minister the leader of the party most likely to command the confidence of the House of Commons, usually by possessing a majority of MPs. Under the uncodified British constitution , executive authority lies with
1183-553: A particular amount. Such upper or lower limits may apply for retirement but not for health-care components of the tax. Some have argued that such taxes on wages are a form of "forced savings" and not really a tax, while others point to redistribution through such systems between generations (from newer cohorts to older cohorts) and across income levels (from higher income levels to lower income-levels) which suggests that such programs are really taxed and spending programs. Unemployment and similar taxes are often imposed on employers based on
1274-625: A result of market forces . Certain countries (usually small in size or population, which results in a smaller infrastructure and social expenditure) function as tax havens by imposing minimal taxes on the personal income of individuals and corporate income. These tax havens attract capital from abroad (particularly from larger economies) while resulting in loss of tax revenues within other non-haven countries (through base erosion and profit shifting ). Legal and economic definitions of taxes differ, such that many transfers to governments are not considered taxes by economists. For example, some transfers to
1365-524: A single-rate form of taxation regardless of ability to pay (the Community Charge , but more popularly referred to as the Poll Tax), led to widespread refusal to pay and to incidents of civil unrest, known colloquially as the ' Poll Tax Riots '. Some types of taxes have been proposed but not actually adopted in any major jurisdiction. These include: An ad valorem tax is one where the tax base
1456-502: A subsidy, and so was a suitable way of providing additional funding for the UK film industry whilst avoiding criticism from abroad. The Eady Levy came into effect on 9 September 1950 on a voluntary basis to subsidize British film producers. In 1953, the UK Government indicated it would legislate if the exhibitors did not agree to continue the voluntary agreement. It was not established on a statutory basis until its incorporation in
1547-604: A substantial grant from the government, the Sovereign Support Grant , and Queen Elizabeth II's inheritance from her mother, Queen Elizabeth The Queen Mother , was exempt from inheritance tax . In addition to legislative powers, His Majesty's Government has substantial influence over local authorities and other bodies set up by it, through financial powers and grants. Many functions carried out by local authorities, such as paying out housing benefits and council tax benefits, are funded or substantially part-funded by
1638-437: A tax on net worth (assets minus liabilities), as a percentage of the net worth, or a percentage of the net worth exceeding a certain level. The tax may be levied on " natural " or " legal persons. " A value-added tax (VAT), also known as Goods and Services Tax (GST), Single Business Tax, or Turnover Tax in some countries, applies the equivalent of a sales tax to every operation that creates value. To give an example, sheet steel
1729-441: A tax on an individual's income and corporate income . Countries or sub-units often also impose wealth taxes , inheritance taxes , gift taxes , property taxes , sales taxes , use taxes , environmental taxes , payroll taxes , duties , or tariffs . It is also possible to levy a tax on tax, as with a gross receipts tax . In economic terms ( circular flow of income ), taxation transfers wealth from households or businesses to
1820-424: Is a constitutional monarchy in which the reigning monarch (that is, the king or queen who is the head of state at any given time) does not make any open political decisions. All political decisions are taken by the government and Parliament. This constitutional state of affairs is the result of a long history of constraining and reducing the political power of the monarch, beginning with Magna Carta in 1215. Since
1911-493: Is a per unit tax, where the tax base is the quantity of something, regardless of its price. An excise tax is an example. Consumption tax refers to any tax on non-investment spending and can be implemented by means of a sales tax, consumer value-added tax, or by modifying an income tax to allow for unlimited deductions for investment or savings. This includes natural resources consumption tax , greenhouse gas tax (i.e. carbon tax ), "sulfuric tax", and others. The stated purpose
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#17327719413712002-430: Is a distinction between an estate tax and an inheritance tax: the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate. However, this distinction does not apply in other jurisdictions; for example, if using this terminology UK inheritance tax would be an estate tax. An expatriation tax is a tax on individuals who renounce their citizenship or residence. The tax
2093-601: Is a full VAT. The province of Quebec collects the Quebec Sales Tax [QST] which is based on the GST with certain differences. Most businesses can claim back the GST, HST, and QST they pay, and so effectively it is the final consumer who pays the tax. An excise duty is an indirect tax imposed upon goods during the process of their manufacture, production or distribution, and is usually proportionate to their quantity or value. Excise duties were first introduced into England in
2184-442: Is a general tax levied periodically on residents who own personal property (personalty) within the jurisdiction. Vehicle and boat registration fees are subsets of this kind of tax. The tax is often designed with blanket coverage and large exceptions for things like food and clothing. Household goods are often exempt when kept or used within the household. Any otherwise non-exempt object can lose its exemption if regularly kept outside
2275-596: Is a tax on the consumption of carbon-based non-renewable fuels, such as petrol, diesel-fuel, jet fuels, and natural gas. The object is to reduce the release of carbon into the atmosphere. In the United Kingdom, vehicle excise duty is an annual tax on vehicle ownership. An import or export tariff (also called customs duty or impost) is a charge for the movement of goods through a political border. Tariffs discourage trade , and they may be used by governments to protect domestic industries. A proportion of tariff revenues
2366-440: Is an ad valorem tax levy on the value of a property that the owner of the property is required to pay to a government in which the property is situated. Multiple jurisdictions may tax the same property. There are three general varieties of property: land, improvements to land (immovable human-made things, e.g. buildings), and personal property (movable things). Real estate or realty is the combination of land and improvements to
2457-464: Is economically justified, as it will not deter production, distort market mechanisms or otherwise create deadweight losses the way other taxes do. When real estate is held by a higher government unit or some other entity not subject to taxation by the local government, the taxing authority may receive a payment in lieu of taxes to compensate it for some or all of the foregone tax revenues. In many jurisdictions (including many American states), there
2548-495: Is generally a gain on sale of capital assets—that is, those assets not held for sale in the ordinary course of business. Capital assets include personal assets in many jurisdictions. Some jurisdictions provide preferential rates of tax or only partial taxation for capital gains. Some jurisdictions impose different rates or levels of capital-gains taxation based on the length of time the asset was held. Because tax rates are often much lower for capital gains than for ordinary income, there
2639-468: Is imported by a machine manufacturer. That manufacturer will pay the VAT on the purchase price, remitting that amount to the government. The manufacturer will then transform the steel into a machine, selling the machine for a higher price to a wholesale distributor. The manufacturer will collect the VAT on the higher price but will remit to the government only the excess related to the "value-added" (the price over
2730-541: Is named FairTax . In Canada, the federal sales tax is called the Goods and Services Tax (GST) and now stands at 5%. The provinces of British Columbia, Saskatchewan, Manitoba, and Prince Edward Island also have a provincial sales tax [PST]. The provinces of Nova Scotia, New Brunswick, Newfoundland & Labrador, and Ontario have harmonized their provincial sales taxes with the GST—Harmonized Sales Tax [HST], and thus
2821-603: Is not vital. A government is not required to resign even if it loses the confidence of the Lords and is defeated in key votes in that House. The House of Commons is thus the responsible house . The prime minister is held to account during Prime Minister's Questions (PMQs) which provides an opportunity for MPs from all parties to question the PM on any subject. There are also departmental questions when ministers answer questions relating to their specific departmental brief. Unlike PMQs, both
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2912-528: Is often hypothecated to pay the government to maintain a navy or border police. The classic ways of cheating a tariff are smuggling or declaring a false value of goods. Tax, tariff and trade rules in modern times are usually set together because of their common impact on industrial policy , investment policy , and agricultural policy . A trade bloc is a group of allied countries agreeing to minimize or eliminate tariffs against trade with each other, and possibly to impose protective tariffs on imports from outside
3003-544: Is often imposed based on a deemed disposition of all the individual's property. One example is the United States under the American Jobs Creation Act , where any individual who has a net worth of $ 2 million or an average income-tax liability of $ 127,000 who renounces his or her citizenship and leaves the country is automatically assumed to have done so for tax avoidance reasons and is subject to
3094-486: Is sometimes called a net wealth tax . Recurrent property taxes may be imposed on immovable property (real property) and on some classes of movable property. In addition, recurrent taxes may be imposed on the net wealth of individuals or corporations. Many jurisdictions impose inheritance tax on property at time of inheritance or gift tax at the time of gift transfer. Some jurisdictions impose taxes on financial or capital transactions . A property tax (or millage tax)
3185-439: Is the value of a good, service, or property. Sales taxes, tariffs, property taxes, inheritance taxes, and value-added taxes are different types of ad valorem tax. An ad valorem tax is typically imposed at the time of a transaction (sales tax or value-added tax (VAT)) but it may be imposed on an annual basis (property tax) or in connection with another significant event (inheritance tax or tariffs). In contrast to ad valorem taxation
3276-399: Is to reduce the environmental impact by repricing . Economists describe environmental impacts as negative externalities . As early as 1920, Arthur Pigou suggested a tax to deal with externalities (see also the section on Increased economic welfare below). The proper implementation of environmental taxes has been the subject of a long-lasting debate. An important feature of tax systems is
3367-412: Is widespread controversy and dispute about the proper definition of capital. Corporate tax refers to income tax, capital tax, net-worth tax, or other taxes imposed on corporations. Rates of tax and the taxable base for corporations may differ from those for individuals or for other taxable persons. Many countries provide publicly funded retirement or healthcare systems. In connection with these systems,
3458-541: The Cinematograph Films Act 1957 ( 5 & 6 Eliz. 2 . c. 21). In the Eady Levy, a proportion of the ticket price was to be pooled – half to be retained by exhibitors (i.e. effectively a rebate on the tax) and half to be divided among qualifying 'British' films in proportion to UK box office revenue, with no obligation to invest in further production. The Finance Act 1950 had previously made
3549-483: The Greater London Authority disputed. Similarly, the monarch is immune from criminal prosecution and may only be sued with his permission (this is known as sovereign immunity ). The sovereign, by law, is not required to pay income tax, but Queen Elizabeth II voluntarily paid it from 1993 until the end of her reign in 2022, and also paid local rates voluntarily. However, the monarchy also received
3640-551: The National Film and Television School , which trained a number of directors and actors still in work today. The Eady Levy was intended to support UK film production. However, in a White Paper in 1984, the British Government recognised that the levy was no longer fulfilling its original purpose, with much of the payment going directly to distributors rather than producers, and proving an unreasonable burden on
3731-472: The customs house , and revenue derived from that source is called excise revenue proper. The fundamental conception of the term is that of a tax on articles produced or manufactured in a country. In the taxation of such articles of luxury as spirits , beer, tobacco, and cigars, it has been the practice to place a certain duty on the importation of these articles (a customs duty ). Excises (or exemptions from them) are also used to modify consumption patterns of
Eady Levy - Misplaced Pages Continue
3822-402: The elderly , unemployment benefits , transfer payments , subsidies and public transportation . Energy , water and waste management systems are also common public utilities . According to the proponents of the chartalist theory of money creation , taxes are not needed for government revenue, as long as the government in question is able to issue fiat money . According to this view,
3913-511: The Crown, who may use them without having to obtain the consent of Parliament. The prime minister also has weekly meetings with the monarch. What is said in these meetings is strictly private; however, they generally involve government and political matters which the monarch has a "right and a duty" to comment on. Such comments are non-binding however and the King must ultimately abide by decisions of
4004-621: The European Parliament are immune from prosecution in EU states under any circumstance. As a consequence, neither EU bodies nor diplomats have to pay taxes, since it would not be possible to prosecute them for tax evasion. When the UK was a member of the EU, this caused a dispute when the US ambassador to the UK claimed that London's congestion charge was a tax, and not a charge (despite the name), and therefore he did not have to pay it—a claim
4095-516: The United Kingdom , officially His Majesty's Government , abbreviated to HM Government , is the central executive authority of the United Kingdom of Great Britain and Northern Ireland . The government is led by the prime minister (currently Keir Starmer since 5 July 2024) who selects all the other ministers . The country has had a Labour government since 2024. The prime minister Keir Starmer and his most senior ministers belong to
4186-558: The above states, only Alaska and New Hampshire do not levy a state sales tax. Additional information can be obtained at the Federation of Tax Administrators website. In the United States, there is a growing movement for the replacement of all federal payroll and income taxes (both corporate and personal) with a national retail sales tax and monthly tax rebate to households of citizens and legal resident aliens. The tax proposal
4277-485: The arts , public works , distribution , data collection and dissemination , public insurance , and the operation of government itself. A government's ability to raise taxes is called its fiscal capacity . When expenditures exceed tax revenue , a government accumulates government debt . A portion of taxes may be used to service past debts. Governments also use taxes to fund welfare and public services . These services can include education systems , pensions for
4368-412: The bloc. A customs union has a common external tariff , and the participating countries share the revenues from tariffs on goods entering the customs union. In some societies, tariffs also could be imposed by local authorities on the movement of goods between regions (or via specific internal gateways). A notable example is the likin , which became an important revenue source for local governments in
4459-440: The cabinet ministers for the department and junior ministers within the department may answer on behalf of the government, depending on the topic of the question. During debates on legislation proposed by the government, ministers—usually with departmental responsibility for the bill —will lead the debate for the government and respond to points made by MPs or Lords. Committees of both the House of Commons and House of Lords hold
4550-411: The charity commissions) are legally more or less independent of the government, and government powers are legally limited to those retained by the Crown under common law or granted and limited by act of Parliament. Both substantive and procedural limitations are enforceable in the courts by judicial review . Nevertheless, magistrates and mayors can still be arrested and put on trial for corruption, and
4641-684: The cinema industry was opposed. The rise in British cinema (including the James Bond films ) during the 1960s caused by an influx of American producers can be attributed to the Eady Levy – and also to the cheaper production facilities – making it cost far less in the UK to achieve the same quality of production. A number of American film makers worked in Britain in this period on a near-permanent basis, including Sidney Lumet , Stanley Donen , and John Huston . Stanley Kubrick moved to Britain in
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#17327719413714732-436: The confidence of the House of Commons. It requires the support of the House of Commons for the maintenance of supply (by voting through the government's budgets) and to pass primary legislation . By convention, if a government loses the confidence of the House of Commons it must either resign or a general election is held. The support of the Lords, while useful to the government in getting its legislation passed without delay,
4823-605: The correct tax allowances and tax relief. The first known taxation occurred in Ancient Egypt around 3000–2800 BC. Taxes consist of direct or indirect taxes and may be paid in money or as labor equivalent. All countries have a tax system in place to pay for public, common societal, or agreed national needs and for the functions of government. Some countries levy a flat percentage rate of taxation on personal annual income, but most scale taxes are progressive based on brackets of yearly income amounts. Most countries charge
4914-404: The cost of the sheet steel). The wholesale distributor will then continue the process, charging the retail distributor the VAT on the entire price to the retailer, but remitting only the amount related to the distribution mark-up to the government. The last VAT amount is paid by the eventual retail customer who cannot recover any of the previously paid VAT. For a VAT and sales tax of identical rates,
5005-407: The country typically requires employers or employees to make compulsory payments. These payments are often computed by reference to wages or earnings from self-employment. Tax rates are generally fixed, but a different rate may be imposed on employers than on employees. Some systems provide an upper limit on earnings subject to the tax. A few systems provide that the tax is payable only on wages above
5096-672: The early 1960s to make Lolita (1962), Dr. Strangelove (1964), 2001: A Space Odyssey (1968) and A Clockwork Orange (1971), among other films. Another expatriate American, Richard Lester , directed The Beatles ' films A Hard Day's Night (1964) and Help! (1965). It was not only American film makers who came; a number of distinguished European directors also made films in Britain. These included Roman Polanski , François Truffaut (who made Fahrenheit 451 at Pinewood Studios and on location in London and Berkshire) and Jean-Luc Godard . The Eady Levy also provided funding for
5187-422: The effect of discouraging speculative purchases of assets by decreasing liquidity. In the United States , transfer tax is often charged by the state or local government and (in the case of real property transfers) can be tied to the recording of the deed or other transfer documents. Some countries' governments will require a declaration of the taxpayers' balance sheet (assets and liabilities), and from that exact
5278-464: The estates of the deceased. In contrast with a tax on real estate (land and buildings), a land-value tax (or LVT) is levied only on the unimproved value of the land ("land" in this instance may mean either the economic term, i.e., all-natural resources, or the natural resources associated with specific areas of the Earth's surface: "lots" or "land parcels"). Proponents of the land-value tax argue that it
5369-409: The exchequer to be a member of the House of Lords was Lord Denman , who served for one month in 1834. The British monarch is the head of state and the sovereign , but not the head of government . The monarch takes little direct part in governing the country and remains neutral in political affairs. However, the authority of the state that is vested in the sovereign, known as the Crown , remains
5460-400: The exhibition sector. The year 1984 had seen the lowest cinema attendances in the UK of any year in recorded history - with only 54 million tickets sold, fewer than one ticket per head of population – thanks largely to competition from TV and home video, so the tax had a significant effect on the cinema chains' dwindling profits. The Eady Levy was terminated in 1985. Tax A tax is
5551-401: The first year, the levy was one quarter of a penny ( 1 ⁄ 4 d) per ticket sold and raised $ 3 million; in the second year the levy was tripled for ticket prices over 12 pence (12d) to ( 3 ⁄ 4 d) to raise £3 million ($ 8.4 million) per annum. The levy had the effect of both assisting the film industry, and reducing the effect of entertainment tax on film exhibition, to which all
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#17327719413715642-730: The government expenditure of taxes raised is often highly debated in politics and economics . Tax collection is performed by a government agency such as the Internal Revenue Service (IRS) in the United States , His Majesty's Revenue and Customs (HMRC) in the United Kingdom , the Canada Revenue Agency or the Australian Taxation Office . When taxes are not fully paid, the state may impose civil penalties (such as fines or forfeiture ) or criminal penalties (such as incarceration ) on
5733-532: The government has powers to insert commissioners into a local authority to oversee its work, and to issue directives that must be obeyed by the local authority if the local authority is not abiding by its statutory obligations. By contrast, as in European Union (EU) member states, EU officials cannot be prosecuted for any actions carried out in pursuit of their official duties, and foreign country diplomats (though not their employees) and foreign members of
5824-766: The government on the statement. When the government instead chooses to make announcements first outside Parliament, it is often the subject of significant criticism from MPs and the speaker of the House of Commons . The prime minister is based at 10 Downing Street in Westminster , London. Cabinet meetings also take place here. Most government departments have their headquarters nearby in Whitehall . The government's powers include general executive and statutory powers , delegated legislation , and numerous powers of appointment and patronage. However, some powerful officials and bodies, (e.g. HM judges, local authorities , and
5915-485: The government to account, scrutinise its work and examine in detail proposals for legislation. Ministers appear before committees to give evidence and answer questions. Government ministers are also required by convention and the Ministerial Code , when Parliament is sitting, to make major statements regarding government policy or issues of national importance to Parliament. This allows MPs or Lords to question
6006-519: The government. Royal prerogative powers include, but are not limited to, the following: While no formal documents set out the prerogatives, the government published the above list in October 2003 to increase transparency, as some of the powers exercised in the name of the monarch are part of the royal prerogative . However, the complete extent of the royal prerogative powers has never been fully set out, as many of them originated in ancient custom and
6097-627: The government. This affects economic growth and welfare , which can be increased (known as fiscal multiplier ) or decreased (known as excess burden of taxation ). Consequently, taxation is a highly debated topic by some, as although taxation is deemed necessary by consensus for society to function and grow in an orderly and equitable manner through the government provision of public goods and public services , others such as libertarians and anarcho-capitalists are anti-taxation and denounce taxation broadly or in its entirety, classifying taxation as theft or extortion through coercion along with
6188-506: The household. Thus, tax collectors often monitor newspaper articles for stories about wealthy people who have lent art to museums for public display, because the artworks have then become subject to personal property tax. If an artwork had to be sent to another state for some touch-ups, it may have become subject to personal property tax in that state as well. Inheritance tax, also called estate tax, are taxes that arise for inheritance or inherited income. In United States tax law , there
6279-765: The individual characteristics of the taxpayer, whereas indirect taxes are levied on transactions irrespective of the circumstances of buyer or seller." According to this definition, for example, income tax is "direct", and sales tax is "indirect". British Government King Charles III [REDACTED] William, Prince of Wales [REDACTED] Charles III ( King-in-Council ) [REDACTED] Starmer ministry ( L ) Keir Starmer ( L ) Angela Rayner ( L ) ( King-in-Parliament ) [REDACTED] Charles III [REDACTED] [REDACTED] [REDACTED] The Lord Reed The Lord Hodge Andrew Bailey Monetary Policy Committee The government of
6370-512: The jurisdiction, which tax-law principles in the jurisdiction may modify or replace. The incidence of taxation varies by system, and some systems may be viewed as progressive or regressive . Rates of tax may vary or be constant (flat) by income level. Many systems allow individuals certain personal allowances and other non-business reductions to taxable income, although business deductions tend to be favored over personal deductions. Tax-collection agencies often collect personal income tax on
6461-734: The land. Property taxes are usually charged on a recurrent basis (e.g., yearly). A common type of property tax is an annual charge on the ownership of real estate , where the tax base is the estimated value of the property. For a period of over 150 years from 1695, the government of England levied a window tax , with the result that one can still see listed buildings with windows bricked up in order to save their owner's money. A similar tax on hearths existed in France and elsewhere, with similar results. The two most common types of event-driven property taxes are stamp duty , charged upon change of ownership, and inheritance tax , which many countries impose on
6552-508: The late Qing China . Occupational taxes or license fees may be imposed on businesses or individuals engaged in certain businesses. Many jurisdictions impose a tax on vehicles. A poll tax, also called a per capita tax , or capitation tax , is a tax that levies a set amount per individual. It is an example of the concept of fixed tax . One of the earliest taxes mentioned in the Bible of a half-shekel per annum from each adult Jew (Ex. 30:11–16)
6643-475: The loss, such that business losses can only be deducted against business income tax by carrying forward the loss to later tax years. In economics, a negative income tax (abbreviated NIT) is a progressive income tax system where people earning below a certain amount receive supplemental payment from the government instead of paying taxes to the government. Most jurisdictions imposing an income tax treat capital gains as part of income subject to tax. Capital gain
6734-574: The necessary changes in the entertainments tax. The levy was collected by HM Customs and Excise and administered by the British Film Fund Agency . To qualify as a British film, a minimum of 85% of the film had to be shot in the United Kingdom or the Commonwealth, and only three non-British individual salaries could be excluded from the costs of the film, ensuring the employment of British actors, technicians and film crew. In
6825-586: The non-paying entity or individual. The levying of taxes aims to raise revenue to fund governing , to alter prices in order to affect demand , or to regulate some form of cost or benefit . States and their functional equivalents throughout history have used the money provided by taxation to carry out many functions. Some of these include expenditures on economic infrastructure ( roads , public transportation , sanitation , legal systems , public security , public education , public health systems ), military , scientific research & development , culture and
6916-417: The percentage of the tax burden as it relates to income or consumption. The terms progressive, regressive, and proportional are used to describe the way the rate progresses from low to high, from high to low, or proportionally. The terms describe a distribution effect, which can be applied to any type of tax system (income or consumption) that meets the definition. The terms can also be used to apply meaning to
7007-433: The period of absolute monarchy , or were modified by later constitutional practice. As of 2019, there are around 120 government ministers supported by 560,000 civil servants and other staff working in the 24 ministerial departments and their executive agencies . There are also an additional 20 non-ministerial departments with a range of further responsibilities. In theory, a government minister does not have to be
7098-458: The public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments. Governments also obtain resources by "creating" money and coins (for example, by printing bills and by minting coins), through voluntary gifts (for example, contributions to public universities and museums), by imposing penalties (such as traffic fines ), by borrowing and confiscating criminal proceeds. From
7189-440: The purpose of taxation is to maintain the stability of the currency, express public policy regarding the distribution of wealth, subsidizing certain industries or population groups or isolating the costs of certain benefits, such as highways or social security. The Organisation for Economic Co-operation and Development (OECD) publishes an analysis of the tax systems of member countries. As part of such analysis, OECD has developed
7280-433: The source of executive power exercised by the government. In addition to explicit statutory authority , the Crown also possesses a body of powers in certain matters collectively known as the royal prerogative . These powers range from the authority to issue or withdraw passports to declarations of war. By long-standing convention, most of these powers are delegated from the sovereign to various ministers or other officers of
7371-666: The sovereign, although this authority is exercised only after receiving the advice of the Privy Council . The prime minister, the House of Lords, the Leader of the Opposition, and the police and military high command serve as members and advisers of the monarch on the Privy Council. In most cases the cabinet exercise power directly as leaders of the government departments , though some Cabinet positions are sinecures to
7462-400: The start of Edward VII 's reign in 1901, by convention, the prime minister has been an elected member of Parliament (MP) and thus answerable to the House of Commons, although there were two weeks in 1963 when Alec Douglas-Home was first a member of the House of Lords and then of neither house. A similar convention applies to the position of chancellor of the exchequer . The last chancellor of
7553-410: The supply of people is in fact not fixed over time: on average, couples will choose to have fewer children if a poll tax is imposed. The introduction of a poll tax in medieval England was the primary cause of the 1381 Peasants' Revolt . Scotland was the first to be used to test the new poll tax in 1989 with England and Wales in 1990. The change from progressive local taxation based on property values to
7644-581: The supreme decision-making committee, known as the Cabinet . Ministers of the Crown are responsible to the House in which they sit; they make statements in that House and take questions from members of that House. For most senior ministers this is usually the elected House of Commons rather than the House of Lords . The government is dependent on Parliament to make primary legislation , and general elections are held every five years (at most) to elect
7735-516: The taxation of select consumption, such as a tax on luxury goods and the exemption of basic necessities may be described as having progressive effects as it increases a tax burden on high end consumption and decreases a tax burden on low end consumption. Taxes are sometimes referred to as "direct taxes" or "indirect taxes". The meaning of these terms can vary in different contexts, which can sometimes lead to confusion. An economic definition, by Atkinson, states that "...direct taxes may be adjusted to
7826-405: The total payroll. These taxes may be imposed in both the country and sub-country levels. A wealth tax is levied on the total value of personal assets, including: bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses , financial securities , and personal trusts. Liabilities (primarily mortgages and other loans) are typically deducted, hence it
7917-681: The total tax paid is the same, but it is paid at differing points in the process. VAT is usually administrated by requiring the company to complete a VAT return, giving details of VAT it has been charged (referred to as input tax) and VAT it has charged to others (referred to as output tax). The difference between output tax and input tax is payable to the Local Tax Authority. Many tax authorities have introduced automated VAT which has increased accountability and auditability , by utilizing computer systems, thereby also enabling anti-cybercrime offices as well. Sales taxes are levied when
8008-538: The use of force . Within market economies, taxation is considered the most viable option to operate the government (instead of widespread state ownership of the means of production ), as taxation enables the government to generate revenue without heavily interfering with the market and private businesses; taxation preserves the efficiency and productivity of the private sector by allowing individuals and companies to make their own economic decisions, engage in flexible production , competition , and innovation as
8099-443: The view of economists, a tax is a non-penal, yet compulsory transfer of resources from the private to the public sector , levied on a basis of predetermined criteria and without reference to specific benefits received. In modern taxation systems, governments levy taxes in money; but in-kind and corvée taxation are characteristic of traditional or pre- capitalist states and their functional equivalents. The method of taxation and
8190-516: The year 1643, as part of a scheme of revenue and taxation devised by parliamentarian John Pym and approved by the Long Parliament . These duties consisted of charges on beer, ale, cider, cherry wine, and tobacco, to which list were afterward added paper, soap, candles, malt, hops, and sweets. The basic principle of excise duties was that they were taxes on the production, manufacture, or distribution of articles which could not be taxed through
8281-443: Was a form of the poll tax. Poll taxes are administratively cheap because they are easy to compute and collect and difficult to cheat. Economists have considered poll taxes economically efficient because people are presumed to be in fixed supply and poll taxes, therefore, do not lead to economic distortions. However, poll taxes are very unpopular because poorer people pay a higher proportion of their income than richer people. In addition,
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