Personal AllowanceThe amount of income you can earn tax-free each year. For 2025/26, it's £12,570. It reduces by £1 fo...Basic Rate TaxThe 20% income tax rate applied to taxable income between £0 and £37,700 (above your personal allowa...Higher Rate TaxThe 40% income tax rate applied to income between £50,271 and £125,140. Also called the '40p tax ban...Additional Rate TaxThe 45% income tax rate on income above £125,140. The highest rate of UK income tax....National Insurance (NI)A tax on earnings that funds the state pension, NHS, and benefits. Employees pay 8% on earnings betw...PAYE (Pay As You Earn)The system by which employers deduct income tax and NI from your salary before paying you. Tax is ca...Self AssessmentThe system for reporting income to HMRC if you're self-employed, have multiple income sources, or ea...Tax CodeA code (like 1257L) that tells your employer how much tax-free income to give you. The number × 10 =...P45A form from your employer when you leave a job, showing your total pay and tax for the year so far. ...P60An end-of-year certificate from your employer showing your total pay and deductions for the tax year...P11DA form detailing benefits in kind (company car, private medical, etc.) provided by your employer. Th...Benefit in Kind (BiK)A non-cash benefit from your employer that's taxable, such as a company car, private health insuranc...Salary SacrificeAn arrangement where you give up part of your salary in exchange for a non-cash benefit (pension, EV...Marginal Tax RateThe tax rate on your next pound of income. This determines how much of a pay rise, bonus, or overtim...Nil Rate BandThe inheritance tax threshold — the first £325,000 of your estate is tax-free. Married couples can c...Capital Gains Tax (CGT)Tax on the profit when you sell assets like shares, property (not your main home), or valuables. Ann...Dividend AllowanceThe first £500 of dividend income is tax-free each year (2025/26). Dividends above this are taxed at...ISA (Individual Savings Account)A tax-free savings wrapper. You can save up to £20,000/year across Cash ISAs, Stocks & Shares ISAs, ...Lifetime ISA (LISA)Save up to £4,000/year with a 25% government bonus for buying your first home or retirement. Must be...Gift AidA scheme that lets charities claim an extra 25% on donations from taxpayers. Higher rate taxpayers c...Corporation TaxTax on company profits. The main rate is 25% for companies with profits over £250,000. A small profi...VAT (Value Added Tax)A consumption tax on most goods and services. Standard rate is 20%, reduced rate 5%, zero rate 0%. B...Stamp Duty (SDLT)A tax on property purchases. First-time buyers pay nothing on the first £425,000. Standard buyers pa...Student Loan RepaymentAutomatic deductions from your salary once you earn above the threshold. Plan 1: 9% above £24,990. P...Auto-EnrolmentThe legal requirement for employers to enrol eligible employees into a workplace pension. Minimum co...Annual Allowance (Pensions)The maximum you can contribute to pensions with tax relief in a year. Currently £60,000, but reduced...Personal Allowance TaperThe reduction of your £12,570 personal allowance by £1 for every £2 earned above £100,000. Creates a...Class 2 National InsuranceNI paid by self-employed people. £3.45/week if profits exceed £12,570. Counts towards state pension ...Class 4 National InsuranceNI paid by self-employed people on profits. 6% on profits between £12,570-£50,270, and 2% above £50,...IR35Tax legislation targeting 'disguised employees' who work through limited companies. If caught by IR3...CIS (Construction Industry Scheme)A scheme where construction contractors deduct tax at source from subcontractors. Standard deduction...Tax YearThe UK tax year runs from 6 April to 5 April. All allowances, thresholds, and bands apply to this pe...Qualifying Years (State Pension)Years where you've paid or been credited with enough National Insurance contributions. You need 35 q...State PensionA weekly payment from the government when you reach state pension age (currently 66, rising to 67 an...High Income Child Benefit ChargeA tax charge that claws back child benefit when the higher earner in a household earns over £60,000....