Tax Rebate Glossary

Please is a list of frequently used terms in the finance and tax world. If you are looking for a word or phrase that has not been listed, please feel free to contact us on: questions@taxfix.co.uk

Basic Rate Tax - taxable income above £2,150 is taxed at the basic rate of 22%.

Basic Rate Taxpayer - a person who pays tax at 22% on some of their income because their taxable income is above £2,150.

Bond - a debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing.

Child Tax Credit (CTC) - a tax credit paid to families with at least one child. It is made up of a family element and a child element.

Estate - the whole of one’s possessions, especially all the property and debts left by one at death.

Gross - the amount before tax has been taken off

Higher Rate Tax - taxable income above £33,300 is taxed at the higher rate of 40%.

Higher Rate Taxpayer - a person who pays tax at 40% on some of their income because they have taxable income over £33,300.

Income Tax – a tax levied on annual income of an individual.

Income Threshold - a cut-off level in relation to income whereby people with family income under that particular level are entitled to the Child Tax Credit.

Joint owners - when two or more persons own the same thing.

Lower Rate Tax - the rate of tax which applies to bank and building society interest. The lower rate of tax is 20%.

Net - the amount after tax has been taken off.

P45 - Provided by your employer once you have cease to work with them any longer. It provides a breakdown of your pay and the amount of tax paid.

P60 - Provided at the end of the tax year, it gives a breakdown of the amount of tax and income earned throughout the financial year.

Residue - the remainder of an estate after all claims, debts, and bequests are satisfied.

Starting Rate taxpayer - a person who pays tax at 10% on some of their income.

Starting Rate Tax - starting rate tax of 10% is charged on the first £2,150 of taxable income.

Tax allowance - an amount of income that you do not have to pay tax on.

Term Bond - Bonds of the same issue all maturing at the same time.

Untaxed interest - ‘gross’ interest. Interest paid without tax taken off.