Analysis of Income Tax Assignment Example | Topics and Well Written Essays - 2000 words

Analysis of Income Tax - Assignment Example   There are quite a few changes that have been made to the original figure provided in the scenario, the reason for the changes made are listed below: Note 1: These incomes have previously been included in the gross profit, originally these incomes should not have been added to the gross profit as these incomes are not related to Thomas’s business, and these incomes are related to his private investments. These incomes will be catered to in the total taxable income section that will shortly follow and the gain on disposal of the machinery will be discussed in the capital gains section. Note2: Thomas owns the business and thus all the profit he earns from his business is his own, he is not allowed to devote a sum namely as his salary that will qualify as a tax expense. Note 3: Council Tax for Thomas’s house is not related to his business Note 4: Replacement of house front door is his private expenditure which cannot be included in his business expenditures. Note 5: It has been provided in the scenario that the car is 40% used for Thomas’s private use, thus the expense on patrol will be deducted by 40%, it has been assumed that the patrol used is on the car that is partly used by Thomas. Note 6: Repairs to the car will also be reduced by 40%, as the car is also used for private purposes. Note 7: Insurance and Road fund tax will also be reduced respectively according to the private use of the car. Note 8: Subscription to the Liberal-Democrat Party will not qualify as a business expense as it does not relate to the business, it is a private expense. Note 9: Providing donation to son’s school is a private expenditure, it cannot be added to the business account. Note 10: The depreciation that has been deducted from the net profit is used by using the accountancy principles; however this figure cannot be used for tax purposes. Note 11: Flowers taken home by Thomas is regarded as a withdrawal from the business, the cost of the flowers are not allowed to be added to the cost of the flowers sold by Thomas, the cost of the flowers which are calculated to be 325 will be added back to the net profit originally calculated. Note 12: The depreciation is replaced by the taxation depreciation that is known as capital allowance, this allowance is calculated by using the guidelines that are provided by the governments of different countries, the rule here used is based on United Kingdom guidelines (HMRC). The detailed calculation of the capital allowance is shown below: Annual Investment Allowance:? Machinery Purchased 20,000 Excavating Equipment 21,000 Computer Equipment used for Inventory Control 8,000 Total Annual Investment Allowance 49,000 According to the guidelines provided by the United Kingdom HM Revenue and Customs, a business can claim Annual Investment Allowance; this opportunity has been provided to the businesses to encourage them  to invest in machinery.  

Macro forces analysis Research Paper Example | Topics and Well Written Essays - 1250 words - 1

Macro forces analysis - Research Paper Example Investment in Kenya provides the investor with a chance to access the other east African countries due to Kenya’s strategic location (Njuguna). The research starts with a preview of factors that have lend to Kenya as my choice, followed by a study of Kenya’s cultural, economic and political trends and also an analysis of its technological and competitive position in the international markets. This analysis ends with a recommendation of the investment opportunities in Kenya. Since 1963, Kenya has managed to maintain a diversified economy where the private sector plays a major role (Njuguna). Despite some periods of tension the country has not resulted to civil war or massive intervention in its economy. In the recent past various reforms have taken place including review of public private partnerships meant to attract investors, setting up of a competitive and transparent privatization programme and formulation of vision 2030 to guide Kenya’s investment through a clear outline of government plan for the economy and the requirements, benefits of partnerships (Linda). A number of factors make Kenya a strategic country for investment among many nations. These factors range from its location, availability of labour, favourable government policies, availability of raw materials for industries, availability of affiliate services, political stability, a favourable social structure and a high level of economic growth (Otieno). Kenya is currently at 57.1 on economic freedom making it 111th freest economy according to 2014 index. This score is 1.2 points higher than 2013 with notable improvements in labour freedom, monetary freedom and trade freedom. Measures have been implemented to financial management and efficiency. Kenya’s location is strategic due to its direct access to Indian Ocean that is endowed with a beautiful and extensive natural harbour at along its coast. This is the