A
Adjusted Net Income (ANI)
Your total taxable income minus certain tax reliefs, such as trading losses, Grossed-up Gift Aid donations, and Grossed-up pension contributions. ANI is used to calculate if you lose your Personal Allowance or have to pay the High Income Child Benefit Charge.
Learn more about Adjusted Net Income (ANI) →B
Basic Rate
The tax band where you pay 20% Income Tax. In the 2025/26 tax year, this applies to income between £12,571 and £50,270 (in England, Wales, and Northern Ireland).
Benefit in Kind (BiK)
A non-cash benefit provided by an employer, such as a company car or private medical insurance. These are often taxable and can affect your tax code.
C
Capital Gains Tax (CGT)
A tax on the profit you make when you sell or dispose of an asset that has increased in value, such as a second property or shares.
Learn more about Capital Gains Tax (CGT) →D
Dividend
A payment made by a corporation to its shareholders, usually as a distribution of profits. Dividends have their own tax rates and a specific tax-free allowance.
Learn more about Dividend →G
Gift Aid
A scheme allowing charities to claim basic rate tax on your donations. If you are a higher or additional rate taxpayer, you can claim the extra tax relief yourself through your tax return.
H
High Income Child Benefit Charge (HICBC)
A tax charge that applies if you or your partner have an Adjusted Net Income over £60,000 and one of you receives Child Benefit. The benefit is fully tapered away once income reaches £80,000.
Learn more about High Income Child Benefit Charge (HICBC) →Higher Rate
The tax band where you pay 40% Income Tax. In 2025/26, this applies to income between £50,271 and £125,140.
K
K Code
A tax code used when your deductions (like company car tax or past tax owed) are greater than your Personal Allowance. It effectively adds 'phantom' income to your payslip to collect the tax due.
Learn more about K Code →M
Marriage Allowance
Allows you to transfer £1,260 of your Personal Allowance to your husband, wife, or civil partner. This can reduce their tax by up to £252 in the tax year.
N
National Insurance Contributions (NICs)
A tax on earnings and self-employed profits paid by employees, employers, and the self-employed to qualify for certain state benefits and the State Pension.
P
PAYE (Pay As You Earn)
HMRC's system to collect Income Tax and National Insurance directly from your wages or occupational pension before they are paid to you.
Personal Allowance
The amount of income you can earn each tax year before you start paying Income Tax. For the 2025/26 tax year, the standard Personal Allowance is £12,570.
Personal Savings Allowance (PSA)
The amount of interest you can earn tax-free. It is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers get £0.
R
Relief at Source
A method of paying into a pension where your contribution is made from your post-tax (net) pay, and your pension provider claims basic rate tax relief from HMRC to add to your pot.
Learn more about Relief at Source →S
Salary Sacrifice
An agreement where you give up part of your salary in exchange for a non-cash benefit, like employer pension contributions or an electric car. This lowers your taxable income, saving both tax and National Insurance.
Learn more about Salary Sacrifice →Self Assessment
HMRC's system used to collect Income Tax. You must complete a tax return if you have complicated tax affairs, are self-employed, a company director, or have other untaxed income.
Learn more about Self Assessment →