Starter quiz
- Income Tax is applied at what percentage rate for earnings above £12,571, but below £50,270?
- 10%
- 20% ✓
- 30%
- 40%
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- A payslip includes pay information and also includes Income Tax and ______ Insurance.
- 'National' ✓
- Which service is not funded by Income Tax?
- the NHS
- pension ✓
- education
- defence and security
-
- Match the weekly taxable income for National Insurance to the tax percentage.
- 0%⇔£123 to £242 ✓
- 8%⇔£242.01 to £967 ✓
- 2%⇔over £967 ✓
- Which best describes a progressive tax system?
- Everyone pays the same percentage of tax regardless of income.
- People with higher incomes pay a higher percentage of tax. ✓
- Only the wealthy are taxed.
- Tax rates decrease as income increases.
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- All ______ are taken from your salary before you are paid.
- earnings
- deductions ✓
- taxes
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Exit quiz
- Match the words to the correct definition.
- tax⇔charges imposed by the Government on citizens and businesses ✓
- tax avoidance⇔legal methods of avoiding paying as much tax as possible ✓
- tax evasion⇔illegal, punishable methods of avoiding paying tax ✓
- Which is not an essential public service that is funded through taxation?
- infrastructure
- healthcare
- education
- restaurants ✓
-
- Match the legislation with its purpose.
- Finance Act (2024)⇔extended prison sentence for tax evasion ✓
- General Anti-Abuse Rule (2013)⇔stopped people from using artificial ways to avoid tax ✓
- Tax Avoidance Schemes Regulation (2021)⇔introduced computer programs to analyse tax returns ✓
- Paying taxes is not only a legal obligation, but a ______ duty.
- 'civic' ✓
- Which two examples are an alternative method for countries who don't collect Income Tax to generate income?
- increasing tourism ✓
- printing more money
- increasing National Insurance
- selling natural resources ✓
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- Taxation is a way of ensuring that society as a whole takes care of its most __________ members.
- valuable
- virtuous
- vulnerable ✓
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Lesson Details
Key learning points
- Taxation funds essential public services, ensuring universal access to healthcare, education and infrastructure.
- Tax avoidance, though legal, reduces government revenue, whereas tax evasion is illegal and punishable by law.
- Taxation upholds social equity by ensuring proportional contributions based on income levels.
- Tax-free economies often rely on high consumption taxes or privatised services, increasing financial barriers to access.
- Without taxation, public services would become market-dependent, exacerbating social and economic inequalities.
Common misconception
All governments charge their citizens Income Tax.
There are many countries that do not pay Income Tax at all; their governments get their income elsewhere like from VAT or natural resources.
Keywords
Tax - the charges imposed by the Government on citizens and corporations to finance some of its spending
Tax avoidance - legal methods of avoiding paying as much tax as possible
Tax evasion - illegal methods of avoiding paying tax, punishable with fines or imprisonment
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