ACCA ATX key terms

The system under which a taxpayer calculates their own UK tax liability, files a return by the statutory deadline and pays the tax due, with HMRC checking returns afterwards rather than issuing an assessment first.

Advance payments of income tax and Class 4 national insurance made twice yearly, normally on 31 January and 31 July, by taxpayers whose previous year's tax bill exceeded the de minimis limit.

The period, normally twelve months after the filing deadline, during which HMRC may open a compliance check into a submitted self-assessment return; after it closes, assessments are generally possible only in limited cases.

An assessment HMRC can raise outside the normal enquiry window when it discovers an underpayment, for example because of new information or careless or deliberate behaviour by the taxpayer.

The set of rules in UK law that decides whether an individual is UK resident for a tax year, using automatic tests based on days present, ties such as work and family, and split-year treatment.

A legal concept describing the country a person regards as their permanent home. Unlike residence, domicile is hard to change and affects access to the remittance basis and the scope of inheritance tax.

A way for certain UK-resident but non-UK-domiciled individuals to be taxed only on foreign income and gains they bring into the UK, usually in exchange for losing allowances and paying a charge.

A rule allowing a tax year to be divided into a UK-resident part and a non-resident part when someone arrives in or leaves the UK, so that each part is taxed separately.

The amount of income an individual can receive free of UK income tax in a tax year, reduced for those with adjusted net income above £100,000 and withdrawn entirely at £125,140.

Total income less certain reliefs such as trading losses and gross pension contributions; it determines entitlement to the personal allowance and the high-income child benefit charge.

The rules allowing a sole trader or partnership to set a trading loss against other income or gains, carry it forward, or carry it back, subject to conditions and caps.

A capital allowance giving 100% tax relief on most plant and machinery purchased by a business up to £1 million a year, with special rules for cars and related-party purchases.

The tax-free slice of chargeable gains an individual or trust can realise in a tax year, £3,000 for individuals, before capital gains tax applies; unused amounts cannot be carried forward.

A capital gains tax relief giving a 10% rate on qualifying gains from disposing of a business or its assets, subject to a £1 million lifetime limit and conditions on trading and ownership.

A relief that lets the donor and recipient of certain business or agricultural assets agree to defer the capital gain until the recipient later sells, rather than taxing it on the gift.

Relief that exempts or reduces capital gains tax on a dwelling that has been the taxpayer's main home, with extra relief for the final period of ownership.

National insurance contributions paid by self-employed individuals on trading profits between the lower and upper profits limits, with a lower rate applying above the upper limit.

The threshold amount of an estate, currently £325,000, that is charged inheritance tax at 0%; transfers above it are taxed at 40% unless a lower rate applies.

An additional inheritance tax allowance of up to £175,000 available when a main home passes to direct descendants, tapered for estates over £2 million and transferable between spouses.

A lifetime gift that becomes exempt from inheritance tax if the donor survives seven years; otherwise it is taxed using the rates and bands applying at death.

A lifetime transfer into a discretionary trust or similar arrangement that is immediately chargeable to inheritance tax at lifetime rates and also uses the nil rate band.

An inheritance tax relief that reduces the value of qualifying unquoted trading business interests and certain business assets, often by 100%, after a two-year ownership period.

A reduction in inheritance tax on lifetime transfers made three to seven years before death, cutting the tax charged on the transfer by 20% for each full year survived.

Assets situated outside the UK owned by a non-UK-domiciled individual that fall outside the scope of UK inheritance tax, although residence rules may still bring them into charge.

Advance corporation tax payments made in four instalments during the accounting period by larger companies, based on estimated liabilities, with interest charged on underpayments.

A UK company controlled by five or fewer participators, or by participators who are directors, which faces special tax rules on loans and benefits.

A temporary 33.75% corporation tax charge on certain loans made by a close company to its participators, refundable when the loan is repaid or written off.

The surrender of trading losses, excess capital allowances and certain other amounts between UK group companies, allowing the loss to reduce another member's taxable profits.

Relief allowing trading losses to be surrendered between a consortium company and its members, where each member holds at least 5% and the consortium holds at least 75%.

The rules requiring transactions between connected companies to be priced on arm's-length terms for tax purposes, with adjustments and documentation required for larger groups.

A company resident outside the UK but controlled by UK residents, whose low-taxed profits may be attributed back to a UK company under anti-avoidance rules.

A fixed place of business or dependent agent in a country that gives that country the right to tax the business profits attributable to it under a tax treaty.

Relief that prevents the same income or gains being taxed twice, usually by crediting foreign tax against UK tax under a treaty or by deducting the foreign tax.

The level of taxable turnover at which a business must register for VAT, currently £90,000, tested on a rolling twelve-month basis or by looking forward thirty days.

The rule determining which country's VAT applies to a supply of goods or services, depending on the nature of the supply and the status and location of the customer.

An election that makes supplies of otherwise exempt commercial property subject to VAT, allowing the owner to recover input tax and charge VAT on rent.

A UK rule that counteracts abusive tax arrangements whose main purpose is to obtain a tax advantage, applying a double-reasonableness test and exposing users to penalties.

A regime requiring promoters and, in some cases, users of specified tax avoidance arrangements to notify HMRC, so that schemes can be identified and challenged early.

The illegal non-payment or underpayment of tax by deliberate concealment, misrepresentation or failure to disclose, exposing the taxpayer to criminal sanctions and professional discipline.

The process of concealing the proceeds of crime; tax advisers must apply customer due diligence and report suspicious activity to the authorities under anti-money-laundering rules.