Learn the UK Tax Language

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UK Tax Glossary

Welcome to our Tax Glossary. Here you will find clear and comprehensible definitions of most of the tax terms you will face when dealing with UK income tax. This Glossary will help you understand the tax language, however it will not offer direct solutions to your tax issues. If you need further advice on any of those tax terms - just ask a tax adviser and get a free consultation right now!

Letter: P

P11D: Forms P11D show the cash equivalent of taxable benefits provided to employees earning £8,500 per annum or more and directors. They are completed by the Employer and copies must be provided to both the HMRC and the employee by 6 July after the end of the tax year.

P45: A form showing taxable pay and tax paid from the start of the tax year up to the leaving date. It is issued by the employer when one leaves a job. It comes in four parts:
Part 1 - Sent by the employer to their tax office.
Part 1A - For the taxpayer to keep
Parts 2 & 3 - To be given to any new employer to ensure correct tax continues to be deducted.

P50: A Form for claiming tax back when one has stopped working. In detail, it is to be used only if:
  • one is unemployed and not claiming Jobseeker's allowance or taxable Incapacity Benefit and you expect to be unemployed for 4 weeks or more, or
  • one has retired permanently and is not claiming Jobseeker's Allowance or taxable Incapacity Benefit, or
  • one is not claiming Jobseeker's Allowance or taxable Incapacity Benefit and do not expect to claim or go back to work (including part-time or casual employment) before the start of the new tax year on 6 April.

P60: A form issued by the employer stating taxable pay ata tax deducted together with the tax code operated up to the tax year end - 5th April. It also shows details of national insurance contributions paid and any student loan deductions are also shown.

P85: A form to be used when one has left or is about to leave the UK. It helps the Tax Office decide how one should be treated for UK tax purposes after leaving the UK.

P86: This form should be completed if one has come to the UK for the first time or after a period of absence. It helps the Tax Office decide one's residence treatment for income and capital gains tax purposes, give one the correct income tax allowances and, if relevant, review one's domicile position.

P91: A form used by the Tax office to collect details of a taxpayer's employment history where\r\n
  • They are unsure what a taxpayer has been doing since 6 April of the current year
  • There are gaps in one's employment of ten weeks or more.

P9D: Company benefits are not taxable if the employee is paid at a rate of less than £8500 per year. In these cases, the employer advises the revenue of any benefits provided on a form P9D.

PAYE: PAYE stands for Pay As You Earn. Your employer is responsible for deducting tax and national insurance from your salary and paying this over to the HMRC. For more information, please refer to our PAYE tax section.

PAYE Coding Notice: The form shows the allowances and deductions used in calculating your tax code. It is used by your employer or pension provider to determine the tax deducted over the year.

Payment on Account: Under Self Assessment some people make two payments on account of tax in advance of the final payment date. Payments on Account are based on the tax for the previous tax year. They are due on 31 January in the tax year and 31 July after its end.

Penalties: The HMRC are able to impose penalties where it has been established that tax has been lost through fraudulent or negligent conduct. Some penalties are for fixed amounts and others are based on the amount of tax lost. The HMRC does however, have the ability to reduce the amount dependant upon the individual circumstances.

Personal Allowance: A tax-free amount of income in each tax year. The amount is called the personal allowance (for 2008/09 - £6035). If income is below that level in the tax year, no tax is due.

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