TaxMatters. Understanding Income Tax. Key Stage 3 lesson plan. Subjects. Resources and preparation. Lesson objectives.

Transcription

1 Income 1 of 7 Subjects Economic Wellbeing with Financial Capability (England) Personal and Social Education (Wales) Financial Education (Scotland) Personal and Social Development (Scotland) Learning for Life and Work (Northern Ireland) Mathematics with Financial Capability (Northern Ireland) Citizenship (England, Wales and Scotland) Lesson objectives Resources and preparation An interactive whiteboard or projector linked to a PC with an Internet connection. Ideally, laptops or PCs for the class if not, you will have to show videos and conduct quizzes for the class. Income ice-breaker (see the last page of this document) Bookmark the Matters website: This lesson stands on its own but works well as the second in a series following discussion of National Insurance. To find out who pays income tax and how much they have to pay To look at the different ways tax is paid according to employment status To learn the importance of understanding and monitoring tax payments Introduction Students are probably aware they will have to pay tax but may not know how much or the mechanisms for payment. They may not realise they could pay tax when they reach 16 if they leave school or work lots of hours in part-time jobs. Prepare for questions on why tax has to be paid but try and deflect these for the plenary or as an introduction to the Citizenship lesson. Explain the differences between tax paid through an employer or as a selfemployed person. You can also talk through the various tax bands and point out that, although the 40% band is high, a good proportion of the UK population earn enough to have to pay it.

2 Income 2 of 7 Activities Start by looking through the Income factfile, either on individual PCs/Laptops or using a projector at the front of the classroom. Individual work Get students to write down the following in their jotters: A list of the types of earnings that are taxable The basic and higher rates of tax and how much somebody has to earn before paying them The tax-free income rates (personal allowances) these can be found by searching the internet Income Ice-breaker Download and print or copy questions from the attached Income Ice-breaker sheet. Students use the sheet to check they understand the types of taxable earnings listed in the first task above. Students have five minutes to complete the sheet by finding somebody in the class who can explain one type of taxable income. Classroom discussion Show the example Payslip (Income Facts page 5). Discuss what each of the different numbered items shows on the example do they all make sense? What does NI stand for? Discuss the amount deducted overall from the wages. Does it seem excessive? What would students expect to get from paying all this money in tax? Whole class activity Students should be paired off (preferably according to ability in mixed-ability classes). Half the class should watch Pete s video story and the other half should watch Katie s and make notes about how each has to pay their tax. Pete and Katie pairs should then be joined in groups of four to explain to each other the differences between self-employment and working for an employer. Finish with a class discussion on the benefits and disadvantages of each type of work would they prefer to be employed or self-employed? Whole class/individual end-of-lesson Go to the Income quiz. Either run this as an individual activity students can challenge their friends or compete in groups or conduct as a whole class show of hands (or use activote software if available).

3 Income 3 of 7 Plenary What do the students now understand by Income? Does the tax system sound fair to them? What do they think taxes are used for? Use this as an introduction to the Citizenship lesson on the way the government uses the tax system to fund public services. Taking this further Students looking for extension work at any point in the lesson could: 1. Tackle the games on the Income website 2. Think of ways in which they could be self-employed: what hobbies or interests could they use to make money? Would they make enough to live on? Can they make a list of the things they would be able to claim as non-taxable expenses? 3. A numeracy extension could involve looking at average wages for a number of different jobs and calculating the Income paid on an annual basis: Average UK wages men Average UK wages women Financial worker in London Grade D Nurse Healthcare assistant University lecturer Lorry driver Library assistant Policeman 16-year-old on minimum wage Pay per month 2,250 1, , , , ,500 1, , Annual pay 27,000 21,500 50,000 22,000 13,900 42,000 23,000 11,000 35,000 7,000 Remember that nothing is paid on the tax-free personal allowance ( 6,475 for 2009/2010) and that higher rate tax of 40% is paid on earnings above 37,400 (for 2009/2010). 4. Income tax was first introduced in Use the internet to find out more about the history of the tax, who originally paid it and how it has changed over the years.

4 Income Curriculum information England (National curriculum) Economic Wellbeing with Financial Capability KS3 Pupils should be taught: how to understand the economic environment a range of economic and business terms personal budgeting to identify how finance will play an important part in their lives Citizenship KS3 Pupils need to understand: different kinds of rights and obligations and how these affect both individuals and communities the needs of the local community and how these are met through public services how economic decisions are made, including where public money comes from Wales Personal and Social Education KS3 Learners should understand: how to become competent at managing personal finances their responsibilities as young citizens in Wales Pupils should: be aware of the importance of planning for their financial futures See also Citizenship links for England 4 of 7

5 Income Scotland Financial Education Pupils need to: understand key financial and economic ideas be skilled in managing their financial affairs recognise the importance of using financial resources responsibly and must be prepared to: identify and tackle everyday financial issues and problems engage critically with economic issues Citizenship Pupils need to understand: the working of the economy and to develop: informed and reasoned opinions about economic issues Personal and Social Development Pupils need to be given the opportunity to learn about independence and interdependence through: making choices studying their role in community 5 of 7

6 Income Northern Ireland Learning for Life and Work KS3 Pupils should have opportunities to: investigate how an employer might deal with issues affecting work investigate ways to participate in society develop an awareness of the challenges and benefits of building their own business Mathematics with Financial Capability KS3 Pupils should be developed as: contributors to society contributors to the economy and should: apply mathematical skills in everyday financial planning 6 of 7

7 Income 7 of 7 ICE-BREAKER Type of able Income Earnings from employment Earnings from self-employment Pensions income Interest from savings Dividend income from shares Rental income Income paid from a trust What does it mean? Who knew?