Tax Jargon Buster
Capital Gains Tax – This is a tax on the profit or ‘gain’ made when an asset is disposed of, i.e. sold, transferred or given away.
Corporation Tax – This is a tax on a company or organisation’s profits.
Expat tax – A tax obligation that applies to individuals or companies who have accounts in a country/countries outside of their home jurisdiction.
HMRC - HM Revenues & Customs (HMRC) is the UK’s statutory authority which collects individual and company taxes. They’ll also be on the case to carry out inspections and investigations where there is any suspicion of tax evasion.
PAYE – Pay as You Earn (PAYE) is the tax HMRC places on employees’ income. It’s the job of in-house payroll and tax experts to make the calculations and ensure the correct amount of tax is deducted from each pay packet and delivered to HMRC each month. On each payslip you receive, you will notice the amount of tax which has been contributed from your pay.
Tax evasion – Some companies and individuals do try to be sneaky and find ways to avoid tax payments. An area of work in the tax industry is to investigate cases of illegal practice activity here.
Tax haven – A term given to a country or territory that has a low rate of taxes, or even none at all, and is therefore attractive as a location for individuals or businesses as a way of avoiding payment of taxes at home.
Tax loophole – This refers to part of a tax law which can be exploited in order to reduce or even avoid tax payments. It’s not strictly illegal to take advantage of tax loopholes, but they are sometimes ‘exploited’ for an individual or company’s gain.
Tax Professional Development Programme (TPDP) – HMRC’s graduate recruitment programme that trains up its graduate intake to be a tax generalists or specialists in tax areas such as investigation work.