Tax Glossary UK - Glossario Tasse Imposte Fiscale UK

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A form which must be given to you if you leave your employment during the tax year and tax has been deducted from your pay.

You should retain part 1A of the form for your records but give parts 2 and 3 to your new employer.


A certificate detailing your income, tax deducted and national insurance for your current employment, as well as any earlier employments in the same tax year.

The P60 is given to you by your employer at the end of the tax year.


An Inland Revenue form which you need to complete when you arrive (P86) in or depart (P85) from the UK.

The questions help determine your residence status.


A relationship between two or more people who are in business together.

PAYE: Acronym for Pay As You Earn

PAYE is the system under which your employer deducts income tax from your pay during the year.

It is a sophisticated system as it takes into account your personal allowances and the different tax rates and tax bands.

The tax deducted must be shown on your payslip each pay day, and on the P45 which is given to you when you leave that employment, or on the P60 form which is given to you at the end of the tax year.


Your PAYE code enables your allowances to be taken into account when calculating the tax to be deducted from your pay under the PAYE scheme.

The code number is constructed by adding the allowances available and deducting benefits in kind from which tax cannot be deducted, and other untaxed income.

It can also be adjusted to collect amounts of income tax not deducted in earlier years.

PAYE Settlement Agreement

An arrangement under which your employer pays any income tax due on certain benefits and expenses payments.

It is intended to be used for minor and irregular expenses and benefits and for those payments and expenses where it is impractical to account for the tax in any other way.

Items included in a PAYE settlement agreement are not included on your P11D or P9D and should not be included on your Tax Return.

Pay As You Earn

PAYE is the system under which your employer deducts income tax from your pay during the year. It is a sophisticated system as it takes into account your personal allowances and the different tax rates and tax bands.

The tax deducted must be shown on your payslip each pay day, and on the P45 which is given to you when you leave that employment, or on the P60 form which is given to you at the end of the tax year.

Payment on Account

A tax payment made during the year "on account" based on your final tax liability (tax owed for the prior tax year).

A repayment or further liability arises when you complete your Tax Return and finalise the year's tax due.

Payment to a Trade Union or Friendly Society for Death Benefits

The part of your trade union subscription that entitles you to pension, life insurance or funeral benefits, or the part of the premiums you pay to a Friendly Society for a combination of sickness and death benefits, that are tax deductible.

The tax relief is one half of your payment which went to provide the benefit.

Payroll Giving

A scheme which gives you tax relief for payments you make to a registered charity.

The payments are deducted from your pay by your employer and paid to a charitable agency.

The scheme is also known as Give As You Earn (GAYE).

Pension Carry Forward Relief

If you are not in a company pension scheme and you have not paid the maximum contributions to your retirement annuity contract or personal pension plan, the unused tax relief can be carried forward for up to six years.

Pension Contributions

Payments you make out of earnings or profits to a pension scheme.

This may be your employer's pension scheme, or your own retirement annuity contract or personal pension plan.

In return you will receive a pension once you have retired. Contributions are tax deductible.

Pension Income

Regular payments you receive from a pension fund.

Pension Scheme

A scheme which you pay pension contributions to.

The company running the scheme then invests the money and pays you a pension when you retire.

An approved pension scheme has various tax exemptions.


A pension is a regular payment to you from a pension scheme once you have retired or have reached an age when you are entitled to draw that pension.

Pensions Carry Back

If you are not in a company pension scheme, you can elect for your pension contributions to your retirement annuity contract or personal pension plan to be treated as paid in the previous tax year.

Your tax relief will be calculated by reference to your taxable income in that year.


Acronym for "Personal Equity Plan", a tax free investment plan. Income and capital gains are tax free.


Another name for the benefits given to you by your employer.

Permanent Workplace

A workplace which you attend regularly to carry out your employment duties.

Not a temporary workplace. A permanent workplace includes a base which you attend daily to receive a list of your duties.

You may not have a permanent workplace or you may have more than one.

Personal Allowance

Everyone is entitled to receive an amount of income before being liable to tax.

Personal Equity Plan

A personal equity plan (PEP) is a tax free investment plan. Income and capital gains from it are tax free.

Personal Pension Plans

If you are employed but are not a member of your employer's pension scheme, or are self employed or in partnership, you can pay into a Personal Pension Plan.

You can choose your own pension provider and how the funds are invested.

Your contributions to your personal pension plan are subject to set limits based on your age and your net relevant earning.

Payments to a personal pension plan qualify for tax relief.

Plant and Machinery

The apparatus or equipment which you use for your trade.

This does not include the premises in which you trade, such as your factory or shop, or the goods which you process or sell, such as raw materials and stock.

It does include machinery used in your factory, display counters in a shop, cars, lorries and vans used for business purposes by yourself and your employees, computers and other office equipment, and so on.

The cost of plant and machinery is not tax deductible, but you can claim capital allowances instead.

Pool of Assets

You may add together amounts you spend on most items of plant and machinery, deduct the proceeds of items you have sold, and calculate your capital allowances on the total expenditure.

The term "pool of assets" is used to cover all plant and machinery where the expenditure has been aggregated.

Postacquisition Charge

A postacquisition charge will arise if you have obtained shares from your employment and those shares increase in value because a restriction has been lifted.

A charge may also arise if you hold shares in dependent subsidiaries and you have either owned them for seven years or you have now sold them.

The increase in value of your shares will be charged to income tax.

Postacquisition Event

An event that gives rise to a post acquisitioncharge.

Postcessation Income

Income you continue to receive from a business after it has stopped trading.

Postcessation Expenditure

Expenses you continue to pay relating to a business you used to have.

Postemployment Deductions

Expenses you continue to incur relating to an employment you used to have and which are tax deductible.

Potentially Exempt Transfer

If you make a gift during your lifetime, it could be liable to inheritance tax.

Some gifts are exempt from inheritance tax, such as gifts to your spouse.


Acronym for Personal Pension Plan.

Preceding Year Basis

Before the introduction of selfassessment, some income was taxed on this basis. It is no longer relevant.

Preference Shares

Shares in a company which have preferential rights over other shares.

For example the nominal value of preference shares is repaid to preference shareholders before payments are made to ordinary shareholders if the company is wound up.

Also, dividends on preference shares will be paid in priority to dividends on ordinary shares.

Premium Bonds

A national savings scheme backed by HM Treasury similar to a lottery.

You buy bonds which participate in regular draws until you cash your bonds.

Any winnings are tax free and should not be entered on your Tax Return.


Something you have paid in advance of the liability arising. For instance, you may pay telephone rentals quarterly in advance.

Private Medical Insurance

Insurance cover to meet the costs of private medical treatment.

Cover may be restricted in the amount of benefits it will pay and the circumstances in which it will pay them.

Private medical insurance is commonly arranged by employers for employees and their families.


The amount you receive from selling something. If you have given an asset away, you are treated as if you had received proceeds equal to the market value of the asset, even if you have received nothing.

If an asset is destroyed, or becomes worthless, and you do not receive any insurance moneys, the proceeds will be taken as nil.

Professional Fees

Fees paid for work done by a professional such as an accountant, solicitor, architect and so on.


The term used to describe the amount of income received after deducting all the expenses paid out in earning that income.

May also be used to describe the amount you receive on the sale of an asset after deducting the cost of the asset and any expenses that you incurred in buying or selling that asset.

Profit Related Pay

Income paid to you under a scheme arranged by your employer and approved by the Inland Revenue, where the amount of pay you receive is directly related to your employer's profitability.

Profit related pay is tax free up to set limits and income tax relief is given by deducting the tax free amount from your pay before calculating the tax to be deducted under PAYE.

Tax relief for profit related pay is being phased out.

Profitsharing Schemes

Schemes under which shares are allocated to employees.

If the scheme is approved by the Inland Revenue, the allocation is tax free provided the shares are retained by the trustees for three years before being transferred to you.

Profits from Business

The term used to describe the amount of income received after deducting all the expenses related to the business venture where the income has come from.


Event or campaign which you run to advertise your business, or the provision of free samples to potential new customers.

The cost of promotions is normally tax deductible, but there may be restrictions for certain free gifts.


Can be anything from a building to an antique, stamp collection and so on.

Protective Clothing

Something that is worn over your everyday clothing (personal or working) so that it does not get soiled, or damaged in some way. 

The cost of providing it is tax deductible.


A figure in your Tax Return which is estimated because the final figure is not yet available.

If your Tax Return contains a provisional figure, you must tell the Inland Revenue what the final amount is as soon as it is known.


Acronym for PAYE settlement agreement.

AVVERTENZE D'UTILIZZO: Il presente glossario contiene una definizione dei termini più utilizzati in ambito fiscale e d'imposte nel Regno Unito.
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