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Jargon Buster

  • 975 certificate
    A Section 975 tax certificate is a written statement showing the interest earned and tax paid on an account.
  • Annual exemption
    The amount you can give away each tax year that will be exempt from Inheritance Tax. This is currently £3,000 and applies to one gift or a number of gifts up to that amount.
  • Annuity
    A series of fixed payments paid over a fixed number of years or during the lifetime of an individual, or both.
  • ATT
    Association of Taxation Technicians
  • Capital Gains Tax
    Capital Gains Tax is a tax on the gain or profit you make when you sell, give away or otherwise dispose of something.
  • Chargeable Income
    This is the total amount of income from all sources that an individual will have to pay income tax on. This is after allowances, exemptions and deductions. Chargeable income is as it suggests, income that is chargeable to income tax.
  • CIOT
    Chartered Institute of Taxation
  • Dependant
    This could be your spouse, partner, civil partner, a child aged under 23 or a financially dependant physically or mentally impaired adult.
  • Domicile
    The country where the law treats you as having your real home.
  • DVLA
    The Driver and Vehicle Licensing Agency
  • DWP
    The Department for Work and Pensions (DWP) is responsible for welfare and pension policy.
  • ESC A19
    Extra-Statutory Concession A19 is a practice developed by the former Inland Revenue (now HMRC) to cover situations where an error or administrative failure of theirs resulted in someone paying too little income tax or capital gains tax.
  • FSA
    The Financial Services Authority
  • HMRC
    Her Majesty's Revenue and Customs
  • ICAEW
    Institute of Chartered Accountants in England and Wales
  • Inheritance Tax
    Inheritance Tax is usually paid on an estate when somebody dies.
  • LEL
    Lower Earning Limit - An amount approximately equal to the Basic State Pension. It represents the level of earnings at which you start to qualify for a national insurance (NI) rebate for contracting out of the State Pension scheme (S2P). The LEL increases each year. For the tax year 2012/2013 it is £5,564 a year or £107 per week.
  • LITRG
    The Low Incomes Tax Reform Group provides a voice to people on low incomes caught up in today's complicated tax and benefits systems
  • MARD
    Mutual Assistance in the Recovery of Debt
  • Nominated retirement date
    The date you told your pension provider that you would like to retire. This may be a set date for a company pension.
  • P11D
    Your employer uses a P11D to tell HMRC about the value of any benefits in kind they've given you during the tax year.
  • P161W
    Use form P161 Bereavement benefit coding to tell HMRC about changes to your income because your spouse or civil partner has died - this will help to make sure you pay the right tax as soon as possible
  • P45
    You get a P45 from your employer when you stop working for them. It's a record of your pay and the tax that's been deducted from it so far in the tax year.
  • P60
    The P60 confirms an employee's final tax code and shows their total pension and/or earnings for the year, as well as the year's total tax deductions and National Insurance contributions.
  • PAYE
    Pay-as-you-earn
  • Probate
    The legal ability of the executors of your will to distribute your estate
  • R27
    If you’re dealing with the estate of a deceased person because you are a Personal Representative or Executor, use form R27 to finalise their tax position. You can also use this form to authorise someone else to deal directly with HMRC on your behalf.
  • R40
    Use form R40 to claim a refund if you think you have paid too much tax on interest from your savings.
  • R85
    Use form R85 to tell your bank or building society that you qualify for tax free interest on your account.
  • Standing Order
    Standing orders are a way of setting up a regular, fixed payment from your bank account.
  • Taper Relief
    This reduces the amount of Inheritance Tax the recipient has to pay on a gift you made to them between three and seven years before your death.
  • UTR
    A Unique Tax Reference or UTR number is provided to you by HMRC once you have registered to become self-employed. It is made up of 10 numbers, for example 1234567890 and you need to provide it when you complete your self-assessment tax return.
  • Wages
    Wages includes sick pay, maternity or paternity pay and adoption pay.
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