Impacts of Taxation on Small and Big Businesses Essay

Impacts of Taxation on Small and Big Businesses - Essay Example ne either by an individual who is self-employed in his or her own small business or by a person who owns, manages and is the employee of his or her own business. If the treatment of tax of the income is derived from such activities differs greatly depending on the legal form in which the businesses are conducted, then the system of tax is more likely going to have a strong influence on the ways small and bug businesses are structured. Without any good reasons for favouring one legal form over the other, such distortions ought to be avoided. This will need both the same treatment of income from employment and self-employment within the personal system of tax and a similar treatment of income derived from small business and from small unincorporated business within the whole tax system (Welsh & White 2001, pp.18 – 27). As well as having these variety of legal forms, a second fundamental reason as to why small business do present vital challenges for tax design is that the income derived from the activities of small businesses do reflects a mix of rewards for labour supplied by those who work for the business and returns to the supplied capital by those who invest in the business (Button 2009, pp.389–408). The United Kingdom business community makes a huge contribution to the treasury’s coffer every fiscal year in terms of tax contribution. In the previous financial year, a total of one hundred and sixty three billion sterling pounds was paid as taxes by the business that are operating in the UK. Breaking the contribution of the business further down shows that, in addition to paying tax on the profits, businesses also contribute. This is based on their roles as the owners of the property, consumer of goods and services, employers and the impact on the environment (Adams et al. 2008, pp.101–115). It is also important to note that businesses contribute to the efficient running of the system of tax and the economy of the country, on top of their direct

Finance Essay Example | Topics and Well Written Essays - 2250 words - 6

Finance - Essay Example Therefore, for those organizations, the cost of capital can be measured through a weighted average method that can be termed as weighted average cost capital. In specific, the execution of cost of capital is due to figure out the hurdle rate that the companies come across with and are supposed to overcome in order to generate earnings. This method is widely exploited during the process of capital budgeting to identify the risk or favorable scenario for the company to proceed with a concerned project (Droms and Wright, 2010, pp. 31-34). From the financer’s standpoint, the investors are looking for respective profit over the company’s existing securities portfolio, which is used to assess a companys new project, because it is expected return that the investor is anticipated for providing funds, with the lowest rate of return, thereby establishing a benchmark that should be adhered by the new project (Pedell, 2006, pp. 26-31). The main perspective of this assignment is to analyze the cost of capital, which often known as Weighted Average Cost of Capital (WACC) of the chosen organization. The company that has been chosen for the same analysis is Tesco Plc. Tesco Plc is a British based multinational grocery and general merchandise retailer with its headquartering located in England, United Kingdom (UK). Tesco Plc is known as the second largest retailer in the world after the Wall-Mart. The company earned net revenue amounting to  £70.894 billion in the year 2013 with net income amounting to  £124.0 million in the same year. The method which has been used for computing the WACC of the selected company comprises on two different aspects, which are cost of debt and cost of equity. The formula of WACC institutionalized to cumulate cost of debt and cost of equity by applying relevant amount of weights with these elements. The justification of this particular method lies in the fact that this method has the tendency to analyze the cost of capital of the