Tax Glossary UK - Glossario Tasse Imposte Fiscale UK



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Abroad

A country other than England, Northern Ireland, Scotland and Wales where UK tax laws do not apply.

Accountant

A person whose job it is to prepare accounts and give you tax advice. They can also liaise with the Inland Revenue on your behalf.

Accounting and Audit Fees

Fees paid to an accountant for preparing business accounts for an audit. These fees are tax deductible.

Acquisition

Term used when you buy (acquire) something.

Accounting Date

The date when the accounting period ends.

For example, if your accounting period runs from 1 July 2005 to 30 June 2006, the accounting date would be 30 June 2006.

There is no restriction on when you choose to have your accounting date, unless you want to change it more than once during a five year period.

In this case, you will need the approval of the Inland Revenue.

Accounting Period

The period for which accounts are prepared.

An accounting period should not normally be longer than 18 months.

A common accounting period is from 6 April to 5 April.

Accruals Basis of Accounting

The method of accounting which adjusts for accruals at the beginning and end of the accounting period, so that the income included in the accounts is that earned during the accounting period, and the expenses are those incurred during the accounting period.

For example you should include sales you have made but which you have not yet been paid for, and the cost of electricity which you have used but have not paid for, even if you have not yet been billed for it.

Accruals

Provisions for income earned but not yet billed, or for expenses incurred but not yet paid.

Examples are the amount of sales you have made but which you have not yet been paid for, and the cost of electricity which you have used but have not paid for, even if you have not yet been billed for it.

Accrued Income

The accrued income scheme applies to Treasury Stock, Building Society Permanent Interest Bearing Shares (PIBS) and so on.

You are only taxed on the amount of interest earned over the period for which you hold the Treasury Stock, PIBs and so on.

You may need to make an adjustment to the interest you actually receive to calculate the amount of interest liable to tax.

Accumulation Units or Shares

You receive extra units or shares instead of a cash distribution.

You need to declare the dividend as though you received it in cash.

This amount is the capital gains tax base cost of the extra units or shares that you have received.

Additional age related allowance

Once you are 65 or over, you are entitled to receive an increase in your personal allowance and married couple's allowance.

The amount your allowances are increased depends on how much taxable income you receive.

You will be entitled to a higher increase if you are 75 or over.

Additional Personal Allowance

This is an additional allowance that you can claim if you are single, separated, divorced or widowed and have a child living with you.

The child must be under 16, or in full time education or training.

You can only claim one allowance, and the amount you claim may be restricted if you marry or separate during the tax year.

Exceptionally, you may be able to claim the allowance if your spouse is unable to care for themselves because of illness or a disability.

Additional Voluntary Contributions

You can make "additional voluntary contributions" to enhance your pension if you belong to an employer's pension scheme.

You can pay these additional contributions into your employer's pension scheme or your own FSAVC Scheme (Free Standing Additional Voluntary Contributions).

There is generally a maximum limit of 15% of remuneration in the case of Inland Revenue approved schemes.

Age Related Allowance

If you are aged 65 or over, you are entitled to receive a higher personal allowance and married couple's allowance.

The additional amount of these allowances depends on how much taxable income you receive.

The age related allowances are further increased if you are 75 or over.

Agency Worker

Someone who is provided by an employment agency to work for a third party.

The contract for the work is between the agency and the third party.

The agency worker is taxed as an employee of the agency.

Alimony

A payment made to a former spouse following divorce or a legal separation.

Allowable Business Expenses

Expenses incurred in the running of your business which you may deduct from the gross trading income before calculating the taxable profit and loss.

Allowable Deductions

Inland Revenue approved deductions that you can deduct from your net income to reduce your tax liability.

Allowable Expense

An expense which you can deduct from your income or capital gains.

For example, you can deduct allowable business expenses from trading income, and allowable rental expenses from the income from letting property.

Your tax liability will be calculated on the net income (gross income minus allowable expenses) or on the net gains (gross capital gains minus allowable expenses).

Allowable Losses

A loss that you can deduct from your income or capital gains.
There are strict rules restricting the way in which loss relief can be claimed.

Examples of losses that may be allowable are trading losses, losses on letting out land and buildings and capital losses from the sale of shares and other assets.

Allowance

A deduction or relief which you may be able to claim depending on your circumstances.

Most people can claim a basic personal allowance, but other allowances available are the additional age related allowances for the elderly (income related), the married couple's allowance, the additional personal allowance for single people bring up children, the widow's bereavement allowance and the blind person's allowance.

Allowances for Care of Invalid Spouse and Child

Another name for the additional personal allowance which you can claim if you have a child and your spouse is totally incapacitated throughout the tax year.

Annual Exemption

Amount which is exempt from tax in any one year.

For capital gains tax, you are allowed to make gains of £6,800 (for 1998/99) before you need to pay capital gains tax.

For inheritance tax purposes, you are allowed to give away £3,000 per annum without the gifts being taken into account.

Annual Percentage Rate (APR)

This is a formula intended to give you the true cost of borrowing money.

It is calculated as the interest that would be charged over the course of a year.

Annuity

A sum of money which is payable regularly. You can pay a lump sum to an insurance company to buy an annuity.

The insurance company pays you an income, usually for the rest of your life. The amount of income is fixed at outset.

You cannot usually get your lump sum back.

Pensions from retirement annuity contracts and personal pension plans are usually paid as annuities.

Approved Discretionary Share Options

Schemes approved by the Inland Revenue under which you can be granted options over shares worth up to £30,000 in your employer's company.

Provided the options are not exercised within 3 years of being granted or within 3 years of the exercise of an option under any approved discretionary share option scheme for which Income Tax relief was given or more than 10 years after their grant, there is no income tax charge on the exercise of the options.)

Approved Savings-Related Share Options

Schemes approved by the Inland Revenue under which you are granted options to buy shares in your employer's company.

They are linked to Save As You Earn SAYE Schemes.

The contributions you make to the SAYE scheme, together with tax-free bonuses, may be used to buy the shares at the end of the term of the SAYE scheme. Most SAYE schemes last for three years.

Approved Share Schemes

Share schemes approved by the Inland Revenue that have various tax advantages.

These include "Approved Discretionary Share option" schemes. "Approved Savings Related Share option" schemes and "Profit Sharing" schemes.

Arising Basis

This term means that you are taxed on (foreign) income based on the date when the payment is due.

You do not have to receive it to be taxed on it.

People who are UK Domiciled are usually taxed on the arising basis.

Artistic

Artistic income is income from the sale of paintings, sculptures, works of art, copyrights and designs.

Artistic income may be spread backwards for one or two years; copyright payments may be spread over the period of the agreement up to a maximum of six years.

Assessment

Before self assessment was introduced, the Inland Revenue calculated your tax and then issued an assessment showing any tax you owed.

These types of assessments are now not normally issued.

An assessment may be issued if you have omitted income from your Tax Return if the deadline for raising enquiries by the Inland Revenue has passed.

Asset

Something that you own.

An asset could be anything from a stamp collection, antique, shares in a company or property or even something intangible.

Authorised Unit Trust

A unit trust is a trust that invests its funds in a spread of equities or fixed interest securities.

A professional manager runs the portfolio. An authorised unit trust is one which can offer units for sale to the general public.

You buy units in the unit trust, the amount you pay being added into the unit trust's funds.

The price you pay for the units is based on the value of the unit trust's investments.

You can sell your units back to the unit trust at any time.

There is a difference between price at which you can buy and sell units, known as the "bid/offer spread".

AVC's: Acronym for "Additional Voluntary Contributions"

You can make "additional voluntary contributions" to enhance your pension if you belong to an employer's pension scheme.

You can pay these additional contributions into your employer's pension scheme or your own FSAVC Scheme (Free Standing Additional Voluntary Contributions).

There is generally a maximum limit of 15% for remuneration in the case of Inland Revenue approved schemes.


AVVERTENZE D'UTILIZZO: Il presente glossario contiene una definizione dei termini più utilizzati in ambito fiscale e d'imposte nel Regno Unito.
La spiegazione di ciascuno dei termini indicati in questo glossario è di carattere meramente orientativo e priva di valore legale; si raccomanda, quindi, di tenere conto del contesto e dell'evento in cui essi vanno applicati, in quanto il significato loro attribuito potrebbe differire rispetto a quello qui rappresentato.

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