UK Tax Glossary · 100 terms

UK tax — what does it all mean?

HMRC uses a lot of acronyms. Here's a plain-English glossary of everything you might encounter — manual codes, forms, legislation, concepts, reliefs.

Common acronyms

AEA: Annual Exempt Amount — the tax-free portion of capital gains. £3,000 in 2026-27.
AIA: Annual Investment Allowance — 100% tax deduction on qualifying business equipment up to £1m/year.
AMAP: Approved Mileage Allowance Payments — HMRC-set rates for tax-free reimbursement of business mileage (45p/mile to 10k miles, 25p above) in your own car.
BADR: Business Asset Disposal Relief — reduced CGT rate (14% in 2026-27, rising to 18% by April 2026) when selling all or part of a qualifying business. £1m lifetime limit.
Used to be called Entrepreneurs' Relief until April 2020.
CGT: Capital Gains Tax — tax on the profit when you sell certain assets (shares, property, businesses).
Rates in 2026-27: 18% basic / 24% higher. Annual exempt amount £3,000.
CIS: Construction Industry Scheme — contractors deduct 20% (or 30% for unregistered) from subcontractor payments, which subcontractors reconcile via Self Assessment.
See also: CISR
CT: Corporation Tax — tax on company profits. 19% small profits / 25% main rate in 2026-27.
See also: CTA 2009, CTA 2010
DAC7: EU/UK rule (since 2024) requiring online platforms (Vinted, eBay, Etsy, Airbnb, Uber etc.) to report seller earnings to HMRC.
HICBC: High Income Child Benefit Charge — claws back Child Benefit if either parent earns over £60,000.
Threshold raised to £60,000 in April 2024 (was £50,000). Full clawback at £80,000. The higher-earning parent pays the charge via Self Assessment.
IHT: Inheritance Tax — tax on the value of an estate above the nil-rate band when someone dies.
Standard rate 40%. Nil-rate band £325,000 + residence nil-rate band £175,000 if leaving main home to descendants.
IR35: The off-payroll working rules — determines whether a contractor working through a personal service company should be taxed as an employee.
See also: ESM
ISA: Individual Savings Account — tax-free savings/investment wrapper. £20,000 annual limit.
IT: Income Tax — tax on earnings (employment, self-employment, rental, dividends, interest).
LISA: Lifetime ISA — for first-home purchase or retirement. £4,000/year, 25% government bonus.
MAR: Mileage Allowance Relief — what you claim from HMRC if your employer pays you LESS than AMAP rates for business mileage.
MTD: Making Tax Digital — HMRC's move to digital tax reporting. VAT MTD mandatory since 2022; ITSA MTD coming for self-employed/landlords from April 2026 (>£50k income).
NI: National Insurance — separate contribution to fund state pension + benefits. Different rates depending on employment status.
Class 1 = employees (8% main rate), Class 2 = self-employed flat rate (mostly abolished from 2024-25), Class 3 = voluntary, Class 4 = self-employed on profits (6% main rate).
NRB: Nil-Rate Band — the IHT-free portion of an estate. £325,000 in 2026-27.
PA: Personal Allowance — the tax-free portion of your income. £12,570 in 2026-27. Tapers to £0 between £100,000 and £125,140 income.
PAYE: Pay As You Earn — how employers deduct income tax + NI from your pay before you receive it.
See also: NI, Tax code
PPR: Private Residence Relief — exempts your main home from CGT for the period you lived in it (plus final 9 months).
PSA: Personal Savings Allowance — tax-free interest income. £1,000 for basic-rate taxpayers, £500 higher, £0 additional.
RNRB: Residence Nil-Rate Band — additional £175,000 IHT-free amount if you leave your main home to direct descendants.
SA: Self Assessment — the system for people who must report their own income to HMRC (not handled by PAYE).
See also: SA100
SIPP: Self-Invested Personal Pension — flexible private pension you control.
VAT: Value Added Tax — sales tax on most goods + services. Mandatory registration above £90,000 turnover.
See also: VATA 1994

Tax concepts

Adjusted net income: Your total taxable income minus certain reliefs (pension contributions, Gift Aid). Used for the £100k PA taper + HICBC threshold.
Carry forward: Using unused pension annual allowance from the previous 3 tax years to contribute more in this year.
Disposal: When you sell, gift, or otherwise transfer ownership of an asset. Triggers a CGT calculation.
Domicile: Where you treat as your permanent home — affects UK tax on foreign income/gains. Different from residence.
Effective rate: Your total tax as a percentage of your total income — different from your marginal rate.
Marginal rate: The tax rate that applies to your NEXT £1 of income. In the £100k-£125k taper band the effective marginal rate is 60%.
Payments on account: Advance payments toward your next year's Self Assessment tax bill — typically 31 January (1st) + 31 July (2nd).
Plant and machinery: Business equipment that qualifies for capital allowances (machines, computers, commercial vehicles). NOT cars (those use separate pools).
Property allowance: Tax-free allowance of £1,000 for casual rental income. Equivalent to trading allowance but for property.
Rent-a-Room: Tax-free allowance of £7,500 if you let a furnished room in your main home.
Residence: Whether HMRC counts you as UK-resident for tax. Determined by the Statutory Residence Test.
Tax code: A code (e.g. 1257L) HMRC gives your employer to determine how much tax-free pay you can have. The number × 10 = your tax-free allowance for the year.
Trading allowance: Tax-free allowance of £1,000 for casual self-employment income. Below £1k you don't need to declare. Above, you do.

Tax reliefs

EIS: Enterprise Investment Scheme — 30% income tax relief + CGT deferral when you invest in qualifying small companies (£1m/year limit).
Employment Allowance: £10,500 reduction in employer's NI bill for eligible businesses (excludes single-director companies, public bodies).
Full Expensing: 100% first-year tax deduction on qualifying main-pool plant for COMPANIES (not the self-employed). No cap. Permanent from April 2023.
Gift Aid: When you donate to charity, the charity claims back basic-rate tax. Higher/additional rate taxpayers claim the extra relief via SA.
Marriage Allowance: Lets a lower-earning spouse/civil partner transfer 10% of their unused PA to the other (if they're a basic-rate taxpayer). Worth up to £252/year.
R&D tax credits: Tax relief on qualifying R&D expenditure. Heavily reformed from April 2024 — merged scheme for most claimants.
SEIS: Seed EIS — even more generous (50% income tax relief) for very early-stage companies. £200,000/year limit.
VCT: Venture Capital Trust — 30% income tax relief + tax-free dividends + tax-free CGT on disposal. £200k annual limit.

Tax forms

CIS300: Monthly CIS return — contractors report payments to subcontractors and tax deducted.
CT600: The Corporation Tax return — what a company submits to HMRC after its accounting period.
P11D: Annual report from your employer to HMRC of any benefits-in-kind you received (company car, healthcare, etc.).
P45: Given by your employer when you leave a job — shows your pay + tax to date so the next employer can put you on the right tax code.
P60: Annual summary of your pay + tax deducted in the tax year. Given by your employer after the tax year ends.
P87: Form for claiming tax relief on employment expenses up to £2,500. Above that, you must use Self Assessment.
SA100: The main Self Assessment tax return form — what you submit to HMRC each year if you're in SA.
SA103: Self-employment supplement to SA100 — for sole traders. S = short form, F = full form.
SA105: UK property supplement to SA100 — for rental income.
SA106: Foreign income supplement to SA100.
SA108: Capital gains supplement to SA100.
VAT100: The VAT return — submitted quarterly (sometimes monthly) by VAT-registered businesses.

HMRC manual codes

BIM: Business Income Manual — HMRC's guidance on taxing self-employed and sole-trader income.
CA: Capital Allowances Manual — HMRC's guide to AIA, WDA, FYA, and Full Expensing for businesses buying assets.
CFM: Corporate Finance Manual — guidance on company-level finance: loans, hedging, derivatives.
CG: Capital Gains Manual — HMRC's guide to CGT calculation, reliefs and exemptions.
CIRD: Corporate Intangibles & R&D — HMRC's guide to Patent Box and R&D tax credits.
CISR: Construction Industry Scheme Reform — HMRC's guide to the CIS deduction scheme.
CTM: Company Taxation Manual — HMRC's main reference for Corporation Tax.
EIM: Employment Income Manual — HMRC's internal guidance on how employees are taxed.
ESM: Employment Status Manual — HMRC's guide to whether someone is employed or self-employed (incl. IR35).
IFM: Investment Funds Manual — taxation of UK and overseas investment funds.
IHTM: Inheritance Tax Manual — HMRC's full guide to estate tax, gifts, reliefs.
INTM: International Manual — residence rules, double-tax treaties, transfer pricing.
IPTM: Insurance Policyholder Taxation Manual — tax treatment of life policies and chargeable events.
NIM: National Insurance Manual — HMRC's full reference on all NI classes (1, 2, 3, 4).
OFM: Offshore Funds Manual — taxation of investments in funds based outside the UK.
PAYE Manual: HMRC's full procedural guide to operating PAYE as an employer.
PIM: Property Income Manual — HMRC's guidance on taxing rental income from UK property.
PTM: Pensions Tax Manual — HMRC's full guidance on pensions: annual allowance, tax relief, drawdown.
SAIM: Savings and Investment Manual — HMRC's guide to taxing interest, dividends, bonds, structured products.
SAM: Self Assessment Manual — HMRC's procedural guide for the Self Assessment system.
TSEM: Trusts, Settlements and Estates Manual — HMRC's guide to trust taxation.
VATFIN: VAT Finance Manual — VAT treatment of financial services, exempt/taxable supplies.
VATLP: VAT Land and Property — VAT treatment of property transactions (incl. option to tax).
VATSC: VAT Supply and Consideration — HMRC's guide to what counts as a taxable VAT supply.
VBNB: VAT Business/Non-Business Manual — when activities are within the scope of VAT vs outside it.
VCM: Venture Capital Schemes Manual — EIS, SEIS and VCT tax reliefs.
VIT: VAT Input Tax — HMRC's guide to recovery of VAT on purchases.

Key legislation

CAA 2001: Capital Allowances Act 2001 — statutory framework for AIA, WDA, FYA.
CTA 2009: Corporation Tax Act 2009 — main statute on company tax computation.
CTA 2010: Corporation Tax Act 2010 — CT rates, reliefs, group rules.
FA: Finance Act — annual statute (one each year) that updates rates and adds new provisions. Cited as e.g. FA 2024.
IHTA 1984: Inheritance Tax Act 1984 — main IHT statute.
ITA 2007: Income Tax Act 2007 — the main statute governing personal income tax in the UK.
ITEPA 2003: Income Tax (Earnings and Pensions) Act 2003 — employment income, benefits in kind, pension tax.
ITTOIA 2005: Income Tax (Trading and Other Income) Act 2005 — taxation of trade profits, property income, savings income.
TCGA 1992: Taxation of Chargeable Gains Act 1992 — main CGT statute.
TMA 1970: Taxes Management Act 1970 — procedural rules: filing, assessments, penalties, interest.
VATA 1994: Value Added Tax Act 1994 — main VAT statute.

Bodies & regulators

FCA: Financial Conduct Authority — regulator of UK financial services.
FOS: Financial Ombudsman Service — free dispute resolution for consumer complaints about financial firms.
HMRC: His Majesty's Revenue and Customs — the UK tax authority.

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