Introduction to Human Capital

These flashcards cover key concepts and details from the 'Introduction to Human Capital' chapter, focusing on definitions, obligations, compliance, and important legislation related to employee taxation in a business context.

What does 'human capital' refer to in a business context?

Human capital refers to the people who work in and contribute to a business.

What are some main cost considerations for employers when hiring staff?

Employers consider the type of staff, skills required, urgency of need, labour availability, and length of the project.

What are the main legal obligations employers have in relation to employee taxation?

Employers must operate PAYE, comply with VAT and other taxes, report income, ensure legal employment practices, and manage health and safety.

What role does a human capital adviser play?

A human capital adviser advises employers on cost-effective and compliant ways to manage employee remuneration and taxation.

What is one cost-effective strategy for employers regarding signing-on bonuses?

Swapping signing-on bonuses with reimbursement of qualifying relocation expenses.

What is the primary focus for the CTA exam in relation to employee taxation?

The primary focus is on cost and compliance, including tax treatment and obligations related to employee payments.

What is the importance of compliance for employers?

Employers have withholding and reporting obligations to HMRC regarding employee incomes and taxes.

What does the acronym PAYE stand for?

Pay As You Earn.

What act governs most statutory rules related to employment income?

The Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).

What is the statutory residence test, and where can it be found?

The statutory residence test determines residency for tax purposes and is contained in Schedule 45 of the Finance Act 2013.