Public finance

Finance and financing.

Unit 1

Text.

Public finance.

The production, distribution, and consumption of material things is the most important condition for the existence and development of human society.

It is the development of commodity money relations that gives rise to the need for finance and credit and to their extensive use. Citizens of all countries have dealings with finance and credit institutions. Government bodies and political parties, public institutions, organizers of production, individuals, and groups are all concerned with finance and credit. What is financing?

The term “finance” derives from Latin “financia ”, meaning “ a money payment”. Finance is a necessary part of any modern economy. Finance concerns money and its utilization in the economy. In essence, it comprises the economic relations that arise in connection with monetary transactions, and formation of monetary income and expenditures.

Finance exists wherever payments are made.

Monetary incomes and accumulations from financial reserves, which provide money for the various requirements of individuals, groups, institutions, and the state.

It is not the private finance of individuals that are important in the life of people and the state, in the development of country’s economy, but public finances, that is, those expressing relations between the state, individuals, and groups.

Financial science deals with public finance. Taxes, duties, excises, loans, and grants are all closely connected with public finances.

State finance as a part of public finance has a long history. It emerged together with the state and developed with it. There are considerable differences in the state financial systems of various countries. But, the financial systems of all countries have though much in common. To the typical features of the financial systems of all modern sates belong the following main parts:

1. The budget systems;

2. The taxation systems;

3. The state credit systems;

4. Income from state –operated enterprises;

5. The state social insurance systems;

6. Customs revenues;;

As regards their organizational structure, state financial systems operate on two levels

a) Central institutions acting on a country-wide scale,

and

b) Institutions on a local scale (region, district, community, province, state, etc.).

According to the nature of their financial operations, we distinguish:

a) Budget-financing bodies;

b) Tax offices;

c) Credit institutions (banks, saving banks, cooperatives, associations).

Notes.

Finance (sing) финансы, денежные отношения, финансы как наука; a system of finance финансовая система. Public finance финансы (или общественные финансы) финансы, доходы, деньги; государственные финансы; государственные доходы; to finance:

1) финансировать

2) продавать в кредит.

Financier финансист (практик);

To give rise to …….. вызывать;

To deal; to have dealings, to be concerned with иметь дело (с).

Wherever везде, где бы ни ….

On a countrywide scale в масштабе страны.

On a local scale на местном масштабе (муниципальном в том числе) уровне

A saving bank сберегательный банк.

Unit 2

Text.

Looking for finance.

Most people, in some stage of their life, dream of starting their own business, but few actually put these dreams into practice. Ask why not and they will tell you that they cannot start their own venture because they do not have sufficient money. If you have no money, then obviously you are going to have to really entirely on outside finance. It is possible, these days, to find funding for your project without having any money of your own.

These are the main options to you for the financing of your business:

- Investment by an individual, either in the form of capital or loan. Industry – again, either by way of capital or loan facilities, or combination of the two.

- Bank loans and overdrafts;

- Grants, loans, and assistance from government or official sources;

- Payment of the enterprises Allowances for up to a year – a scheme designed to help unemployed people start their own business;

- Hire, purchase, or leasing of plant, equipment, and vehicles.

- Mortgage or rental of property, rather than outright purchase;

- Factoring of debts and invoice discounting;

- Loans against endowments and pensions policies;

- Loans from suppliers within specialists industries;

Any of the above categories of financing may be suitable for you and your business – more likely a combination of several ways.

Notes.

Option выбор, право выбора, вариант, факультатив, предмет выбора, опцион (право на приобретение ценной бумаги).

Invest in industry организация финансирования промышленности в Великобритании.

Invoice счет-фактура

Discount 1. дисконтировать, учитывать векселя, оплачивать.

2. делать скидку, снижать учетный процент, цену.

3. ссужать под вексель при выплате процентов вперед.

Leasing аренда

Endowment (n) вклад, дар, пожертвование.

Mortgage (n) заклад, залог, ипотека.

Plant здание и оборудование.

Unit 3.

Text.

Alternative Sources of finance.

Here are a number of methods of financing your business which do not fall easily under specific headings, but which need looking at carefully.

Using your own money.

Almost inevitably, in the start of a new business, you will be using some of your own money to finance it. This is a good idea because it demonstrates your confidence and will please bankers and suppliers alike. It will also tend to leave you with a great degree of control. Since one of the reasons you are in business is almost certainly that you like the idea being your own boss, retaining control must be an important factor.

However, it is absolutely imperative that you treat any investment made by yourself in exactly the same way, as you would treat a loan from a bank or financial institution. You must see a proper return on your money and you must budget for it. This, of course, supplies not only to money you provide, but to that provided by other members of your family.

Partners.

If you have no money, one method of acquiring it would be to take a partner. Avoid friends, and if you are looking purely for a financial partner, avoid anyone with a particular interest in your type of business – if they have knowledge of your trade, they are bound to interfere with the running of the business. Such a relationship can best be desorbed as having a sleeping partner. Despite the obvious advantages, this is a dangerous relationship and you need recognize it as such right from the beginning. Initially, you will be grateful to whoever lends you money to establish your own business or to expand an existing one. However, once your enterprise is up and running as a result of your own hard work, you will start to resent the payments you have to make to your sleeping partner when he appears to be contributing nothing. As we stated earlier, it is vital to remember that if your sleeping partner had not come across with the money when you needed it, you would have no business at all.

Supplier’s differ credit.

Negotiating extending credit terms is often a very cheap and effective method of obtaining finance.

If your major suppliers have sufficient confidence in you and your business, they may well be prepared to extend your sufficient credit in order that you can be paid for the goods you sell before you have to pay them. This could involve sixty days’ credit or even ninety, and even though you may loose cash discounts, you may well be a cheaper method of finance than borrowing the same sum of money from a bank. In some industries, financial help from suppliers can take an even more tangible form.

Customers’ advance payment.

You may be able to finance your business partially by persuading customers to pay in advance, or at any rate make a part payment on account of the goods or services with which you intend to provide them. Here again, it is a question of establishing confidence, and you may well run the risk of losing your customer if your demands for up-front payment are too extreme. Certain industries traditionally operate in this manner.

Money by acquisition.

If you are having up-and-running successful company, it is possible that you might be able to raise money by the acquisition of another business, followed by an asset-stripping operation. What is meant by this exactly? Many companies get themselves into the position where they have assets tied up in the business, simply not earning their keep in terms of profit. Often, the directors do not recognize either the problem or the real value of the assets. It may be that you have the means of unlocking such a situation, because you have the distribution or sales force to release cash by rapid sale of surplus stock. Alternatively, you might merge your production and sell their factory. Acquiring a company in trouble, with assets, which have become grossly undervalued, could be a way of raising money in the long term. Be careful, though – you need to be very confident that you can do a better job than the company you are buying.

Notes.

A sleeping partner партнер, лишь предоставивший средства (капитал)

Up-and-running успешно функционирующий.

Lesson two

Taxes and taxation.

Unit 1

Text.

What is a tax?

Taxes mean the obligatory withdrawal from the population of part of its income by the state. Taxes are the sources from which the budgetary expenditures of the state are covered. Sometimes taxes become an instrument of regulating social production. Changing the taxation rates, the state can promote or restrain the development of certain brunches of economy. If a taxation rate is very high, it acquires, in fact a prohibitive character. The lower, favorable taxes stimulate the development of a certain industry or the economic activity of the population, in general. Nowadays governments resort to the above methods of regulating the national economies of their countries. This is called taxation, or fiscal policy.

It is not possible to establish income taxes since tax receipts are the fundamental and irreplaceable financial basis of any state. Taxes are levied regularly according to the law and rates existing in a certain state. Each state has the fiscal bodies. There are many kinds of taxes.

Notes.

Withdrawal изъятие, получение

Prohibitive запретительный, прхибитивный

Tax receipts налоговые поступления

To levy a tax взимать налог

A taxation rate налоговая ставка

Fiscal bodies учреждения, занимающиеся сбором налогов, налоговая инспекция, налоговое управление.

Fiscal policy налоговая политика

Taxation policy налоговая политика

Business tax налог на предпринимателя

Poll (capitation) подушный налог

Commodity tax косвенный налог

Company income tax налог с доходов компаний

Consumption tax налог на потребление

Corporation tax налог с доходов корпораций

Death (or inheritance) tax налог на наследство

Legacy tax налог на наследство

Deferred tax отсроченный налог

Amusement tax налог на развлечения

Emergency tax чрезвычайный налог

Employment tax взнос в фонд страхования безработицы

Excess profit tax налог на сверх прибыль

Farm tax налог на фермеров

Effluent tax налог на отходы, загрязняющие окружающую среду

Flat rate tax налог, взимаемый по единой ставке

Franchise tax налог на привилегии

Gift tax налог на дарение

General property tax налог на все виды собственности

Graded tax налог с дифференциальной ставкой

Graduated tax прогрессивный налог

Head tax подушный налог с иммигрантов

Highway tax сбор в правительственный фонд для строительства дорог

Highway users’ tax дорожный налог на проезд

Real estate tax налог на недвижимость

Land tax земельный налог

Luxury tax налог на предметы роскоши

Lump-sum tax аккордный налог (на совокупную сумму налогов)

Occupational tax налог на профессию

Payroll tax налог с суммы зарплаты

Personal property tax налог на личное имущество

Property tax налог на недвижимость

Punitive tax налоговый штраф

Retail sales tax налог с розничного оборота

Retirement tax поступления для погашения государственного долга

Salary tax налог на зарплату служащих

Security transfer tax налог на перевод ценных бумаг

Shared tax долевой налог (делиться м/у административными органами разных уровней)

Social security taxвзнос в фонд социального страхования

Stamp tax гербовый сбор

State tax налог, взимаемый властями штата

Stockholders’ tax налог на доходы по акциям

Use tax налог на пользование

Wage tax налог на заработную плату

Wealth tax налог на имущество

Variable tax переменная пошлина

Withholding tax подоходный налог, взимаемый путем регулярных вычетов из заработной платы; налог с общей суммы дивиденда.

Withholding удержание, вычет

Taxpayer налогоплательщик

Taxableоблагаемый налогом

Tax less не облагаемый налогом

Taxer сборщик налогов

Tax collector, tax-gatherer сборщик налогов

Tax collection сбор налогов

Tax dodger неплательщик налогов

Investment tax credit налоговая скидка на инвестиции.

Revaluation tax налог на переоценку

Tax arrears недоимки по налогам

Evasion of the taxes уклонение от уплаты налогов

Tax benefits налоговые льготы

Tax depression списание налогов

Tax enforcement принудительное взыскание налогов

Tax inspector налоговый инспектор

Tax rebate налоговая льгота

Tax in kind налог, уплачиваемый натурой

Tax on conveyance налог на передачу имущества

Tax recovery взимание налогов

Tax return налоговая декларация

Tax-free освобожденный от налогов

Single tax единый земельный налог

To levy a tax

To impose a tax облагать налогом

To tax

Court tax судебные издержки

Tax-exempt не подлежащий налогообложению.

Unit 2

Text

Value added tax.

Unless the goods or services you supply through your business are zero-rated or your business is sufficiently small that your sales are below the VAT threshold, you need to charge your customers VAT. Generally speaking, you will find that VAT you charge to you on virtually all your purchases and expenses. The differences between the two – i.d. the amount of VAT you charge, as against the amount of VAT charged to you – has to be declared on a quarterly return, and paid over to HM Customs and Excise.

Before you start trading, you need to decide whether your sales are likely to exceed the VAT threshold (currently 21,300). If you think your sales will do so in the first year of trading, then you should register with the customs and excise as a taxable trader for VAT purposes.

If you have decided not to register, because you think that your turnover will be below the annual threshold, you nevertheless must keep a careful check on the level of your sales, once you start to trade. If your turnover exceeds 7,250, you must notify that VAT office. Unless you still believe that your sales will be within the threshold for the full year, you will be registered for VAT. (To be continued)

Notes.

Unless если нет.

To be zero-started быть в положении, когда ставка равна нулю.

Value added tax налог на добавленную стоимость.

Virtually почти.

i.d. = that is то есть.

A quarterly return квартальная декларация о доходах.

HM her majesty ее величество.

HM customs and excise налоговое ведомство в Англии.

Threshold порог, граница.

Currently в настоящее время.

Turnover оборот

To notify поставить в известность.

Unit 3

VAT

(Continued)

Most goods and services are subject to VAT, but some are exempt. The principal exemption in Great Britain are:

- Sale of land and certain works of art

- Insurance, postal services, finance services and betting, gaming and lotteries and sport competitions

- Health and education

- Professional bodies and trade unions

- Burial and cremation.

The bulk of goods and services, which are subject to VAT, are chargeable at the standard rate of 15 per sent in Great Britain. Some, however, are zero-rated – the VAT is, literally, 0 per cent. The main zero-rated categories – affecting day-to-day business- are:

- food and drink (other than confectionery catering and hot food take-away)

- Children’s and protective clothing

- Books, newspapers and journals

- Drugs and medicines on prescription

- Equipment for the disabled

- Passenger transport (more than twelve seats)

- Exports and services to overseas traders

- New buildings, large caravans and houseboats

- Cultural and entertainment services

- Gifts to children

(To be continued).

Notes.

Betting пари, спор

Other than за исключением

Protective clothing рабочая одежда

Large caravans фургоны, в которых живут люди

Houseboats лодки, в которых живут люди

Charity милосердие, благотворительное общество.

Unit 4

Text.

VAT

(Continued).

It is important that you appreciate the difference between zero-rating and VAT exemption. Zero-rating carries a theoretical rate of VAT, which just happens to the 0 per cent. Exemption means that no VAT applies at all. On the face of it, there appears no difference between the two, but there is a significant one. If the goods you sell are zero-rated, you can still reclaim VAT on your supplies. In other words, you register for VAT in the normal way and simply reclaim the VAT you pay. However, if your business is exempt, your status is far from desirable - you cannot reclaim the VAT on your inputs because you cannot register for VAT.

When you are subject to an inspection, you will have to produce all the back-up records. VAT causes a great deal of hours of extra work each week doing what many people consider to be the government’s job. VAT does inflict a discipline on the small business, which formerly was not there. You have to keep records to make VAT returns, and this discipline must be a good thing.

A word of warning. By law, VAT returns have to be kept up date, and there are fines and penalties for late payment and non-payment.

Notes.

To appreciate оценивать, давать оценку, учитывать.

Back up records подтверждающие документы

Does inflict a discipline действительно дисциплинирует; повышает чувство ответственности.

Returns 1 возврат 2 возмещение 3 доход, прибыль, выручка 4 ведомость, отчет 5 декларация о доходах для уплаты налогов,

Up to date на каждый данный день, систематически.

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