An A to Z of Tax from...
Tax Glossary
Welcome to the Taxbuddies glossary. To help you interpret the jargon
that you can come across in dealing with your tax, our team of experts
have written a brief explanation for hundreds of technical terms. Click
on a letter to show entries.
| P11D : | Forms P11D show the cash equivalent of taxable benefits provided to employees earning £8,500 per annum or more and directors. This limit includes the salary plus the value of the benefit provided. They are completed by the Employer and copies must be provided to both H M Revenue & Customs and the employee by 6 July after the end of the tax year. | |
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| P45 : | When you leave a job, your employer will provide you with a form P45. This shows taxable pay and tax paid up to the leaving date. It comes in four parts, Part 1 - Sent by the employer to their tax office. Part 1A - For you to keep Parts 2 & 3 - To be given to any new employer to ensure correct tax continues to be deducted. |
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| P60 : | Employers are required to provide this form to all employees by 19th May after the end of the tax year. The form details taxable pay and tax deducted together with the tax code operated up to the year ended 5th April. In addition details of national insurance contributions paid and any student loan deductions are also shown. | |
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| P9D : | Company benefits are not taxable if the employee is paid at a rate of less than £8500 per year. This limit includes the salary plus the value of the benefit provided. In these cases, the employer advises the revenue of any benefits provided on a form P9D. | |
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| 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 H M Revenue & Customs. |
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| PAYE Coding Notice - P2 : | 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. | |
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| Payment on Account : | Under Self Assessment you are required to make payments on account where your tax liability exceeds £500 AND less than 80% of the tax liability is collected at source. From 2009/10 this limit will be increased to £1000. | |
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| Penalties : | H M Revenue & Customs 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. H M Revenue & Customs do however, have the ability to reduce the amount dependant upon the individual circumstances | |
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| Personal Allowance : | In the 2008/09 tax year the first £5435 of income is tax free. | |
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| Personal Pension Relief : | Payments are normally paid net of basic rate tax. Where the individual is liable to higher rate tax additional relief can be claimed. | |
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| Potentially Exempt Transfer : | These are any transfer of value by an individual to: Another individual; An Accumulation and Maintenance trust; A trust for the disabled; A trust creating an interest in possession They are exempt when made and remain so unless the transferor dies within 7 years of the date of the gift. | |
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| Professional Subscriptions : | Subscriptions paid to professional bodies are often allowed as business expenses. H M Revenue & Customs publishes a list of professional bodies to whom subscriptions qualify for tax relief. |
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