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: S

Savings Income (Interest): This is investment income (e.g. interest paid by banks) and liable to income tax. Generally, tax on interest is deducted at source at a rate of 20%.

Seafarers: For tax purposes, a "seafarer" is one who performs all (or most) of one's duties on a ship, and any duties performed ashore are incidental to the duties on the ship; respectively, a "ship" does not include "offshore installations". Seafarers can qualify for the Seafarers Earnings Deduction (SED) and get back up to 100% of tax paid in UK if they:
  • Work on a ship and
  • Have a qualifying period of at least 365 days at sea and
  • Visit a valid foreign port at least once a year

Seafarers Earnings Deduction (SED): A tax relief available to seafarers. It is also known as Foreign Earnings Deduction. It works as a deduction from the individual`s taxable income. SED applies where the duties of a seafarer resident in the UK are performed wholly or partly outside the UK. In effect, SED can result in a refund of ALL tax paid under PAYE.

Self assessment tax return: The principal instrument issued by the Tax Office to all individuals who have to report their income and pay tax. It is not required only if one's total earnings come from employment, therefore the vast majority of people do not get a Tax Return and pay all their tax under PAYE. However, even employed individuals sometimes have to file a Tax Return.

Self Employment Pages: A set of supplementary pages to the standard Tax Return form. One must fill in the Self-employment Pages if, at any time during a given tax year, they carried on a trade, profession or vocation as a self-employed person in the UK or abroad.

Self employment tax (Self-employed tax): Colloquial phrases referring to tax deducted at source from payments to subcontractors under the Construction Industry Scheme. For more information, please refer to our self-employment tax section.

Starting Rate for Savings: From 2008-09 there is a 10% starting rate for savings income only. If your non-savings income is above this limit then the 10% starting rate for savings will not apply.

Stock or Scrip Dividends: Where shares are offered as an alternative to a cash dividend, it is known as a stock or scrip dividend.

Surcharges: Where tax remains unpaid more than 28 days after the due date, one will be liable to a surcharge of 5% of the unpaid tax. An additional 5% will be levied on any amount still unpaid more than 6 months after the due date. Interest also accrues.

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