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This information applies to England, Wales, Scotland and Northern Ireland
Deeds of covenant
Deeds of covenant are a way of giving money regularly to charity which allows the charity to reclaim the income tax that was paid on the gift.
Filing date
The filing date is the date by which completed tax returns must be received by HM Revenue and Customs. If a return is not received by this date, you may have to pay penalties. The filing date is the 31 January after the tax year which the tax return relates to, for example, for the tax year 2002/03, the filing date would be 31 January 2004.
Fringe benefits
Fringe benefits are non-cash benefits such as company cars, given to employees. Most fringe benefits are taxable. HM Revenue and Customs now use the term benefits in kind.
Gift Aid
Gift Aid is a way of giving a regular or a one-off amount from taxed income to charities. The charity may then claim the tax back.
HM Revenue and Customs (HMRC)
HM Revenue and Customs (HMRC) is the government department responsible for assessing and collecting most types of tax, including VAT. HMRC is also responsible for paying tax credits and child benefit.
Income tax
Income tax is a tax on income. However, there is no single definition of income in tax law. Instead, the law classifies amounts received under various headings, called ’schedules’, and an item must come within one of these headings to count as income.
Income tax allowances
Everyone resident in the United Kingdom is entitled to receive a certain amount of income each year before they have to start paying tax. This amount is called the personal allowance. There are also other additional allowances which can reduce the tax you have to pay. The amounts of the allowances are usually announced each year in the budget.
Income tax code
Income tax code is a code given by HM Revenue and Customs, which shows what allowances an employee is getting under the Pay As You Earn (PAYE) system. The code is usually a three figure number followed by a letter.
Income tax rates
Income tax rates are the percentage rates at which tax is paid. Different rates are applied to different levels of income (called income bands). Income tax rates and income bands are announced each year in the budget and can be found on the HM Revenue and Customs website at:  www.hmrc.gov.uk.
Income tax relief
Income tax relief is expenditure on items that may be deducted from your gross income, before your tax is assessed, so reducing the amount of income on which tax is payable. Some reliefs are given automatically, and other reliefs need to be claimed.
Independent taxation
Married couples used to be treated as one unit for tax purposes, but since 6 April 1990, each spouse is taxed independently of the other.
Inheritance tax
Inheritance tax is a tax paid on a person’s estate after death. It was formerly known as estate duty or capital transfer tax. Inheritance tax may also be payable on some gifts made during a person’s lifetime.
For more information about inheritance tax, in England and Wales, see Inheritance Tax on the Advicenow website at: www.advicenow.org.uk.
Inland Revenue
Inland Revenue used to be the government department for assessing and collecting most types of tax. It is now called as HM Revenue and Customs (HMRC).
ISA
ISA stands for Individual Savings Account. You can save money up to a certain amount each year in an ISA without having to pay tax on the income from your savings.
PAYE
This stands for Pay As You Earn and is the way that all employees, and some other people, pay income tax. HM Revenue and Customs (HMRC) tells the employer how much to deduct. The employer must then deduct the tax from the employee’s wages, and the employer then sends the tax to HMRC.
Payments on account
Payments on account are payments of income tax and Class 4 national insurance contributions which must be paid by self-employed people, or by certain employees. The payments are made in advance of the taxpayer sending in a tax return for a particular tax year, and mean that tax will be paid in two instalments during the tax year.
Personal tax allowances
See Income tax allowances.
Remission of tax arrears
A taxpayer with tax arrears may have some or all of them ’remitted’, that is, the taxpayer will not have to pay all of the arrears, if certain conditions are met.
Revenue calculation
Under Self Assessment, taxpayers may complete their tax return and then ask HM Revenue and Customs (HMRC) to calculate how much tax is payable. They must send the return to HMRC by 30 September, otherwise HMRC will not do the calculation.
Self Assessment
Self assessment taxpayers are responsible for assessing which of their income is taxable and filling in a tax return accordingly. You can then either ask HM Revenue and Customs (HMRC) to calculate the tax due based on the figures in the tax return, see 'revenue calculation', or can calculate the amount of tax due yourself, see 'taxpayer calculation'. HMRC are not responsible for assessing or estimating the amount of tax due if you have not sent HMRC up-to-date figures.
Stamp duty land tax
Stamp duty land tax is a tax that is paid on documents that convey a sale of property or shares. The document is sent to the Stamp Office for stamping, and the tax is paid then.
Tax arrears
Tax arrears are a debt to HM Revenue and Customs for tax owed.
Tax assessment
Tax assessment is the amount of tax which someone must pay. See Self Assessment.
Tax-exempt income
Tax-exempt income is income on which income tax is never payable, for example, some income from National Savings certificates and winnings from gambling.
Tax-free income
Tax-free income is not the same as tax-exempt income. Tax-free income is the personal allowances and tax reliefs which reduce income on which tax would be payable. Once these have been deducted, what remains is called the taxable income.
Taxpayer calculation
Under Self Assessment, taxpayers are responsible for assessing their own taxable income by completing a tax return. You can then ask HM Revenue and Customs to calculate the tax due based on the figures (revenue calculation), or must calculate the tax payable yourself (taxpayer calculation).
Taxable income
Taxable income is the part of total income on which income tax is payable, that is after tax-exempt income and tax-free income have been deducted.
Tax rebates
Tax rebates are payments from HM Revenue and Customs to an individual who has paid too much tax in any particular year. The payment will often not be made until the end of the tax year.
Tax relief
See Income tax relief.
Tax return
Tax return (form SA 100) is the form on which taxpayers must list all income and certain expenses so that the amount of tax due can be calculated. You can do the calculation yourself, or can ask HM Revenue and Customs to calculate how much tax you should pay, see Self Assessment.
Tax years
Tax years run from 6 April one year to 5 April the following year.
TESSA
Tessa stands for Tax Exempt Special Savings Account. It was a special savings account that allowed interest to be paid tax-free. No new ones can be started. From April 2008, all pre-existing TESSAs have automatically become cash ISAs.
VAT
VAT stands for Value Added Tax, which is a tax on goods and services. It is payable at a certain percentage, which is announced by the government in each year’s Budget. It is administered and collected by HM Revenue and Customs.
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