Taxopedia
UK tax glossary, A–Z
Every UK tax term, jargon-free. Type below to filter, or jump to a letter.
218 terms · use the letter nav below or just type
A
AccountantA qualified professional who prepares accounts, files tax returns, and gives financial advice.Accounting softwareSoftware that records business transactions, runs reports and submits returns to HMRC.Additional rate tax45% top rate of UK income tax, paid on income above £125,140.Adjusted net incomeTotal taxable income minus pension contributions and Gift Aid donations.Annual Investment Allowance (AIA)A 100% first-year tax deduction on most equipment, up to £1m per year.Auto-enrolmentUK rule requiring employers to automatically enrol qualifying staff in a workplace pension.Autumn BudgetThe annual UK budget statement delivered by the Chancellor in October/November.
B
BACS paymentBank-to-bank UK payment system; 3 working days to clear, used for salary and HMRC.Business Asset Disposal Relief (BADR)Reduced 14% CGT on qualifying business sales, on lifetime disposals up to £1m.Balancing ChargeTax charge when you sell a business asset for more than its written-down value.Balancing PaymentThe final Self Assessment payment due 31 January each year.Basic tax rate20% UK income tax band, on income from £12,571 up to £50,270.Basis periodThe accounting period that profits are taxed in for sole traders and partnerships.Benefit in kindNon-cash perks from employment (car, health insurance, gym) that count as taxable.Bereavement AllowanceA weekly allowance paid to bereaved spouses or civil partners (replaced by Bereavement Support Payment for new claims).BitcoinA decentralised cryptocurrency; for UK tax purposes treated as an asset for CGT.Blind Person's AllowanceAn extra £3,130 tax-free allowance on top of the standard Personal Allowance.BondsDebt securities — interest is taxable as savings income, gains may be subject to CGT.Brought forwardA loss or unused allowance carried over from a previous year.Business ratesA property tax on most non-domestic properties (shops, offices, warehouses).
C
Capital AllowancesTax deductions for business assets like equipment, machinery and (some) buildings.Capital gainThe profit when you sell a non-personal asset for more than you paid.Capital Gains Tax allowanceThe annual exempt amount of capital gains you can make tax-free — £3,000 in 2025/26.Capital Gains Tax (CGT)UK tax on profits from selling chargeable assets — 18% basic, 24% higher (2025/26).Capital lossA loss when you sell a chargeable asset for less than you paid; offsets future gains.Carer's Allowance£81.90/week (2025/26) for those caring 35+ hours a week for someone with a disability.Carry forwardCarrying an unused tax allowance or loss into a future tax year.Cash basisAccounting method where income is recorded when received and expenses when paid.CEST status toolHMRC online tool to determine if a contract is inside or outside IR35.CHAPS paymentSame-day high-value UK bank transfer, used for property purchases and large invoices.Charitable donationsDonations to UK charities qualify for Gift Aid; higher-rate payers get extra relief.ChattelA movable personal asset (jewellery, art, antiques) — under £6,000 disposal exempt from CGT.Child benefitTax-free benefit for parents — £26.05/week first child, £17.25 each subsequent (2025/26).CIS cardContractor verification card under the Construction Industry Scheme.CIS schemeHMRC's tax-deduction scheme for the construction industry.Community Investment Tax Relief (CITR)Tax relief for investments in qualifying Community Development Finance Institutions.Civil partnershipA legally recognised relationship — for tax purposes treated like marriage.Class 1 National InsuranceNI on employment earnings — 8% employee, 13.8% employer (2025/26).Class 2 National InsuranceSelf-employed flat-rate NI — voluntary from April 2024.Class 3 National InsuranceVoluntary NI to fill gaps in your record and qualify for state pension.Class 4 National InsuranceProfit-based NI for the self-employed — 6% / 2% (2025/26).Companies HouseUK government register of companies — incorporates and stores Ltd company filings.Company directorA person legally responsible for managing a UK Ltd company.Corporation taxTax on UK Ltd company profits — 19% small / 25% main / marginal in between.Compound interestInterest on the original principal plus accumulated interest from prior periods.ContractorA self-employed person engaged on contracts, often via a Ltd company.Council taxLocal authority tax on UK domestic properties; 8 bands by value.Credit recordYour borrowing history kept by Experian, Equifax and TransUnion in the UK.Crowdfunding (UK)Raising small contributions from many people online — taxable as income or gain depending on type.CryptocurrencyDigital assets like Bitcoin and Ethereum — taxed as chargeable assets for CGT.Cryptographic miningEarning crypto by validating transactions; income at GBP value when received.Company Share Option Plans (CSOPs)Tax-advantaged share option plans for UK employees — up to £60k per employee.CWF1HMRC form to register self-employed for Self Assessment + Class 2 NI.
D
Declaration of TrustLegal document declaring the beneficial ownership of an asset, typically property.Direct Debit paymentAutomated recurring payment from a UK bank account, set up by the recipient.Disguised remunerationSchemes that pay employment income via non-cash routes to avoid tax — heavily challenged by HMRC.Dividend allowance£500 of dividends per year (2025/26) that's tax-free, regardless of tax band.DividendA distribution of company profits to shareholders — taxed at lower rates than salary.Double Taxation Agreement (DTA)A treaty between two countries deciding which has primary right to tax cross-border income.
E
Enterprise Management Incentive (EMI)Tax-advantaged share option scheme for SME employees — up to £250k per employee.EmployeeA person engaged under a contract of employment — taxed via PAYE.Enterprise Investment Scheme (EIS)30% income tax relief on qualifying investments in early-stage UK companies.Entrepreneurs' ReliefOld name for Business Asset Disposal Relief — 14% CGT on qualifying business sales.EquityOwnership in a company — usually represented by shares.Equity crowdfundingRaising capital by issuing shares to many small investors online.Home equity releaseBorrowing against the value of your home, repayable on death/sale.EstateA person's assets and liabilities at death — subject to Inheritance Tax above £325k.EthereumA blockchain platform with the cryptocurrency ETH — taxed as a chargeable asset.ExpatA UK citizen living abroad, or a foreign national living in the UK.ExpensesBusiness costs that reduce taxable profit — must be "wholly and exclusively" for the trade.
F
Failure to NotifyPenalty for not telling HMRC when you become liable to tax (up to 100% of tax owed).Fiscal yearThe UK tax year — 6 April to 5 April.Flat rate expensesHMRC-set fixed amounts for common expenses — easier than tracking actuals.Foreign Tax Credit ReliefCredit against UK tax for tax already paid abroad on the same income.Form 64-8HMRC authorisation form letting an accountant act on your behalf.FUT taxItalian tax for entertainers and sports professionals — N/A for UK residents.
G
H
HCPC renewalHealth and Care Professions Council annual registration — fee is tax-deductible.HENRYHigh Earner Not Rich Yet — informal term for high-income, low-net-worth professionals.High-Income Child Benefit ChargeClaws back Child Benefit if income exceeds £60k (fully repaid above £80k).Higher Rate Tax40% UK income tax band, on income from £50,271 to £125,140.HMRCHer Majesty's Revenue & Customs — UK tax authority.HMRC CIS loginOnline portal for contractors to verify and pay sub-contractors under CIS.HMRC Online ServicesGovernment Gateway portal for filing returns, paying tax, viewing records.Home Office AllowanceTax relief for the running costs of working from home.HMRC property income allowance£1,000 tax-free on rental income — useful for casual or low-rent landlords.
I
Incentive Stock OptionA US share option scheme — for UK tax it's typically a Non-Qualified Stock Option.Income TaxUK tax on earnings, profits, pensions, savings and dividends.Inheritance Tax (IHT)UK tax on estates over £325,000 — 40% on the excess.Inheritance Tax allowance£325,000 nil-rate band per person, plus £175,000 residence nil-rate band.InvoiceA document requesting payment for goods or services supplied.IR35Off-payroll working rules for contractors — determines if you're "really" employed.ISA (Individual Savings Account)Tax-free wrapper for savings or investments — £20,000 annual limit.
J
L
LandlordOwner of property let to tenants — rental income is taxable via Self Assessment.Late filing penalty£100 instant fine + further penalties if your tax return is late.Late payment penalty5% surcharge after 30 days late, plus daily interest at 7.75% (2025).Lettings reliefCGT relief when selling a former main home that was let — restricted from April 2020.Limited companyA separate legal entity owned by shareholders, with limited personal liability.Live-in landlordA landlord who shares living space with tenants — qualifies for Rent a Room scheme.Loan chargeTax charge on outstanding "disguised remuneration" loans from past schemes.LocumA temporary professional (often medical) covering for absent staff.LP10 letterHMRC letter requesting information for late filings — usually answerable within 30 days.
M
Making Tax DigitalHMRC programme requiring digital records and quarterly submissions.Marginal tax rateThe tax rate on the next £1 you earn — can be 60%+ for some.Marriage AllowanceTransfer £1,260 of unused Personal Allowance to a basic-rate spouse — saves up to £252.Married Couples' AllowanceTax allowance for couples where one was born before 6 April 1935.Maternity Allowance£187.18/week (2025/26) for self-employed and others not eligible for SMP.Mileage Allowance45p/mile first 10,000 miles, then 25p — tax-free reimbursement for business travel.Mortgage interestInterest on a property loan — restricted basic-rate-only tax credit for residential landlords.Mortgage interest restrictionSection 24 — limits residential landlord interest deduction to 20% basic-rate credit.Mortgage interest tax reliefNow restricted to 20% basic-rate credit for individual residential landlords.
N
National Insurance (NI)Tax on earnings funding state pension and benefits — multiple classes.National Insurance Number (NINo)Your unique UK NI reference — used for everything from tax to benefits.Net incomeTotal income after allowable deductions but before tax allowances.Non-deductibleCosts you can't deduct against business profit (e.g. entertaining, fines).Non-domiciledA UK resident whose permanent home is abroad — can elect remittance basis.Non-residentSomeone who fails the Statutory Residence Test — taxed only on UK-source income.
O
P
P11DAnnual return of benefits-in-kind — filed by employers each July.P45Form your employer gives you when you leave a job — shows pay/tax to date.P46Old form for new employees without a P45 — replaced by the Starter Checklist.P60End-of-year statement showing total pay and tax — issued by your employer in May.P800HMRC reconciliation showing you're owed a refund or owe extra tax.P87 claim formForm to claim tax relief on employment expenses without filing SA.PartnershipA business shared between two or more partners — each taxed on their share.PAYEPay As You Earn — system for collecting tax + NI from employees' wages.PAYE Notice of CodingHMRC letter telling you your tax code and how it's calculated.Payment on AccountTwo advance Self Assessment payments due 31 January and 31 July.PayrollThe process of calculating and paying employee wages, deducting tax/NI.Payroll givingDonate to UK charity straight from gross salary — full tax relief at marginal rate.UK payslipItemised statement showing pay and deductions for a pay period.Peer-to-peer loansLending money to others online — interest is taxable, losses partly relievable.PensionRetirement savings vehicle — contributions get tax relief at marginal rate.Pension Annual Allowance£60,000 max yearly tax-relievable contribution — tapered for high earners.Pension lifetime allowanceThe cap on tax-advantaged pension savings — abolished from April 2024.Pension triple lockState pension uprating mechanism — rises by highest of CPI / wages / 2.5%.Personal AllowanceTax-free annual income — £12,570 (2025/26), tapered above £100,000.Personal Independence PaymentTax-free disability benefit (PIP) — replacing Disability Living Allowance.Personal Savings AllowanceSavings interest you can earn tax-free — £1,000 basic / £500 higher / £0 additional rate.Personal Tax AccountOnline HMRC account to view and manage your tax info.Personal tax returnAnnual UK Self Assessment for individuals — SA100 form.Private Residence ReliefCGT exemption when you sell your main home.Pro rataIn proportion — used for partial-period calculations like part-year salary.ProbateLegal authority to administer a deceased person's estate.ProfitIncome minus allowable expenses — the figure tax is calculated on.Proforma invoiceA preliminary "invoice" used to request payment — not a tax invoice.
R
Real Time Capital Gains Tax ServiceHMRC service to report and pay CGT during the year, before SA filing.Reasonable excuseGenuine reason for missing a tax deadline — can waive penalties.Relief at sourcePension scheme gets basic-rate tax relief automatically; you claim higher-rate via SA.Remittance basisTax option for non-doms — pay UK tax only on income brought into the UK.Rent a Room schemeFirst £7,500/year of rent from lodgers in your home is tax-free.Rent2RentLetting a property and re-letting at higher rent — tax treated as trading.Replacement of domestic items reliefLandlord deduction for replacing furniture, white goods, etc. in let property.Requirement to CorrectHMRC rule for disclosing past offshore non-compliance — heavy penalties otherwise.Resident landlordA landlord living in the same property as a tenant — qualifies for Rent a Room.
S
SA1HMRC form to register for Self Assessment for non-self-employed reasons.SA100 HMRC formThe main Self Assessment tax return — filed annually by individuals.SA101Supplementary SA page for less-common income — EIS, Married Couple's Allowance.SA102Supplementary SA page for employment income.SA103Supplementary SA page for self-employment.SA104Supplementary SA page for partnership income.SA105Supplementary SA page for UK property income (rentals).SA106Supplementary SA page for foreign income.SA107Supplementary SA page for trust income.SA108Supplementary SA page for Capital Gains Tax.SA302HMRC tax calculation summary — used as proof of income for mortgages.SA303HMRC form to apply to reduce Payments on Account.SA370HMRC form to appeal a Self Assessment penalty.Salary sacrificeReduce gross salary in exchange for non-cash benefit (typically pension) — saves tax + NI.Save As You Earn (SAYE)Tax-advantaged employee share plan — save monthly, buy company shares at discount.Savings interestInterest from bank accounts, bonds, P2P — taxable above the Personal Savings Allowance.Seafarer's Earnings Deduction100% UK tax exemption for qualifying seafarers spending most of their time at sea.SecuritiesTradable financial instruments — shares, bonds, derivatives.Seed Enterprise Investment Scheme (SEIS)50% income tax relief on investments in very early-stage UK companies.Self AssessmentAnnual UK tax return system for non-PAYE income.(UK) Self-employedWorking for yourself — files Self Assessment, pays Class 4 NI on profits.Share Incentive Plan (SIP)Tax-advantaged share plan letting employees buy shares from gross salary.ShareholderOwner of shares in a company — receives dividends, has voting rights.SharesUnits of ownership in a company — gains taxed as CGT, dividends as dividend income.Side gigIncome earned alongside a main job — taxable above £1,000 trading allowance.Simple AssessmentHMRC tax-calculation route for simple cases — no need for full Self Assessment.Simplified expensesHMRC flat rates for self-employed — easier than tracking actual costs.Social Investment Tax Relief (SITR)Tax relief for investments in qualifying social enterprises — closed to new investments.Sole traderA self-employed individual operating in their own name — simplest UK business form.Spring statementSmaller annual statement of UK economic forecasts — usually no big tax changes.Stamp Duty Land TaxUK property purchase tax — banded by price, +3% on additional homes.State PensionUK government pension — £230.25/week new rate (2025/26), based on NI record.Student loan deductionsAuto-deducted from PAYE or via Self Assessment above plan thresholds.SubcontractorA self-employed person hired by a contractor — central to CIS.
T
Take-home payNet salary after income tax, NI, pension and student loan deductions.TaxCompulsory contribution to government revenue, levied on income, wealth or transactions.Tax allowanceIncome or gains you can earn without paying tax (Personal Allowance, ISAs, etc.).Tax codeLetters and numbers telling your employer how much PA to apply via PAYE.Tax deductionsAllowable expenses or reliefs that reduce taxable income or profit.Tax efficiencyLegally arranging affairs to minimise tax paid.Tax-free incomeIncome exempt from UK tax (ISA gains, premium bond winnings, scholarships, etc.).Tax written down valueAsset value remaining after capital allowances claimed — used for disposal calc.Taxable incomeThe portion of income subject to UK tax, after allowances and reliefs.TaxpayerA person or entity liable to pay tax.Tenancy in commonForm of joint property ownership where each owner has a defined share.Theatre Tax ReliefCorporation tax credit for qualifying theatre productions.Trading Allowance£1,000/year of casual trading income that's tax-free.Traditional accountingAccruals-basis accounting — record income/expenses when earned/incurred, not paid.TroncTip-distribution scheme used in hospitality — usually NI-free, taxable as income.Trust fundLegal arrangement where trustees hold assets for beneficiaries — taxed separately.
U
V
W
Wage taxesCommon term for income tax + NI deducted from wages via PAYE.Wear and Tear AllowanceOld 10% landlord deduction for furnished lettings — abolished from 2016/17.Welsh rates of Income TaxWelsh income tax bands, currently identical to England/NI.Workplace pensionEmployer-arranged pension scheme — auto-enrol from age 22.
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