Compose a 2250 words essay on Income Tax and Corporation Tax. Needs to be plagiarism free!Under the finance act 2010/2011, there are three types of rate bands, basic rate, higher rate and additional r

Compose a 2250 words essay on Income Tax and Corporation Tax. Needs to be plagiarism free!

Under the finance act 2010/2011, there are three types of rate bands, basic rate, higher rate and additional rate. Every type of income has its own tax rate. These are illustrated in the table below: Basic High Additional Rate Band (?1-?37,400) (?37,401-?150,000) (?150,001 and over) Non-Saving Income 20% 40% 50% Saving Income 20% 40% 50% Dividends Income 10% 32.5% 42.5% If a savings income fall into the basic rate band, then the rate, till the amount of ?2,240 is 10%. Above that the rate of 20% is implied. Any income over and above the individual’s allowance is taxable. There are different kinds of allowances for example personal allowance, old age allowance, married couple allowance, maintenance payment relief, or blind person’s allowance. Personal allowance depends upon the age and income limits, Allowances for the year 2010/2011 are shown below: Age ? Personal Allowance Standard 6,475 Personal Allowance 65 to 74 9,490 Personal Allowance 75 and above 9,640 Income Limit for age-related Allowances 22,900 Income Limit for standard personal allowance 100,000 The blind person’s allowance is 1,890 pounds for the year 2010/2011, there are no age or income limits, and this allowance is in addition to the personal allowance of the entitled individual. Other allowances like married couple’s allowance or maintenance payment relief are entitled to a couple where both the partners are born before 6 April 1935, or either of the partners or formal partners is born before 6 April 1935, respectively. Married couple’s allowance is ?6,965 for the year 2010/11. Tax Period: The relevant tax period for the year 2010/2011 is from 6 April 2010 to 5 April 2011. All the taxes are computed for this period.