TAF unit 2 topic 9.2

How can expenses reduce the amount of tax a self-employed person pays?

• By increasing the taxable income

• By decreasing the taxable income

• By having no effect on taxable income

• By increasing the tax rate

Famous businesses often avoid tax through various methods. Which of the following is a common method?

• Offshore accounts

• Charitable donations

• Employee bonuses

• Stock buybacks

What impact do you think paying tax has on a business?

• It reduces the business's profit.

• It increases the business's expenses.

• It has no impact on the business.

• It improves the business's reputation.

Mix and Match Activity – Match the definitions with the terms

• Option 1

• Option 2

• Option 3

• Option 4

What were the consequences for them?

• They lost their jobs

• They were promoted

• They received a warning

• Nothing happened

What changes did they make?

• They updated the software.

• They changed the design.

• They improved the performance.

• They added new features.

The most straightforward and legal way for a business to reduce its liability is known as tax:

• avoidance.

• planning.

• evasion.

Making the most of allowable expenses, allowances and reliefs is an example of tax:

• evasion

• Avoidance

• planning

R&D relief is available to:

• Sole traders

• Limited companies

• Partners

Tax Evasion is:

• Illegal and a criminal offence

• Legal but morally questionable

• Legal and recommended practice