Macroeconomics Essay Example | Topics and Well Written Essays - 750 words - 5

Macroeconomics - Essay Example US$1000 per month. Zan gained the required documents and was all set to leave for UAE in a month when his seniors’ opinion on going to UAE for job changed. That was December, 2008 and the global financial crisis had almost just started. His seniors told tragic tales. Many of them had themselves come back to Pakistan. Zan heard from his seniors that the construction companies in UAE were downsizing. Many employees were being fired without prior notification; companies were not following the legal procedure to downsize. The pressure on the regulatory authorities was so tremendous that the fired employees were not getting healthy response from them. The employees who were fortunate enough to survive were to take much greater load than before. As the companies had downsized, the survivors had also been assigned the responsibilities of the fired employees. To make it worse, they had their salaries reduced by a substantial percentage rather than getting them increased in compensation for more work. T he employers obliged them to work at lower salaries; else, they had the option to resign. Zan was very disappointed. He had spent months preparing for going to UAE but all had gone in vain. He decided to continue his job in Pakistan. He had thought before of leaving his company as it had been paying him very less, but now, that the rate of unemployment had gone very high because of the global financial crisis, leaving the company seemed a bad idea. One thing Zan knew for sure was that he needed to continue professional development. Pursing further studies seemed like a good way to achieve that. Therefore, he got admission in Masters course of Construction Management at a local engineering university in Pakistan. A major motivation behind getting admission in this course was to secure a scholarship for higher studies abroad. Since Pakistan is a developing country, where the opportunities of development

The rules on the deduction of expenses for employed and self-employed Essay

The rules on the deduction of expenses for employed and self-employed persons are different and create inequity in the tax syste - Essay Example Then, on the behalf of the employees, the employers are required to pay the deducted amount to the treasury. ITEPA 2003 provides for the taxation of employees who are resident and ordinarily resident in the UK. According to Section 18, all general earnings are subjected to tax that are received in the form of money. Section 19 deals with the general earnings received in non-monetary forms. The self-employed are those taxpayers who have their own businesses and act as sole traders. They are required to pay their taxes through self-assessment. The extent to which deductions are allowed for the self-employed tends to be more than they are for the employed taxpayers. As a general rule, all amounts that are given to the employees are taxable regardless of the fact whether the taxpayers hold the employment or not. This rule has a few exceptions though. For instance, Section 85 and 93 provide that provision of a non-cash voucher or a credit token --which is of a kind made available to the p ublic generally-- to an employee, or a member of his family, is not taxable if it is provided on no more favorable terms than to the public generally. There is a reduction in meal vouchers u/s 89. ... The income of a self-employed taxpayer is regarded as income from trade and is taxed under ITTOIA 2005. All the profits from trade are taxed after deducting all the deductible allowances. The deductible expenses include all those expenses that are incurred wholly and exclusively for the purposes of the trade and all those losses are allowed to be deducted that are connected out of the trade. Section 34b provides that for any expense that is incurred for more than one purpose, only that part or portion shall be deductible that can be identified as incurred wholly and exclusively for the purposes of the trade. In the same way, expenses that are incurred by the employees wholly and exclusively for the purposes of employment are also allowed as deductions. For instance, s 390 of Income Tax Act 2007 grants relief for loans that are sanctioned for buying plant or machinery for employment use. There are certain expenses which are of such a nature that it becomes very difficult to ascertain whether they should be allowed as deductions or not. This difficulty not only arises in the cases of employees but also extends to the self-employed. In this regard, case law is very helpful. For instance, s.337(1) of ITEPA 2003 provides that for a travelling expense to be regarded as an allowable deduction: i. â€Å"The employee is obliged to incur and pay them as holder of the employment†; and ii. It must be an expense â€Å"necessarily incurred on travelling in the performance of the duties of the office or employment†. This section was created after the judgements in three landmark cases of Ricketts v Colquhoun (1925) 10 TC 118, Owen v Pook (1969) 45 TC 571 and Taylor v Proven (1974) 49 TC 579.