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The impact of government and the EU
Specification detail The impact of regulation and taxation
and the benefits and drawbacks of minimum wage, maternity/paternity rights and health & safety regulations on business
The European UnionThe European Union is a group of countries
whose governments work together. It's a bit like a club. To join you have to
agree to follow the rules and in return you get certain benefits.
Each country has to pay money to be a member. They mostly do this through taxes.
The EU uses the money to change the way people live and do business in Europe.
Countries join because they think that they will benefit from the changes the EU makes.
Minimum wage
Health and Safety
Accidents are avoided
Increases productivity
Lowers labour turnover
Good reputation – repeat purchase
Reduce work related injury
Expensive to implement
Risk assessments are time consuming
Some staff resent the changes
Maternity and Paternity Rights
Women are allowed 39weeks maternity pay The first 6 weeks, their employer will pay the
mother 90% of their usual earnings. After that, they receive the sum of £125 per
week. The mother is entitled to have her job back
when she returns to work The father can have 2 weeks paid leave after
the baby is born.
TaxationTax Explanation Impact on the Business
Corporation Tax
A business pays tax on its profits (30%)
• Shareholders will get a lower dividend
• Corporations will reinvest their profit as an expense, to decrease their profit.
VAT (value added tax)
This must be paid on goods and services (17.5)Some items, such as children’s clothes, are exempt
This makes items more expensive for the consumer.
Income Tax A tax paid by employees on their earnings.
This leads to an increase in money people have to live and spend on other products.
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