TOPIC 12 Flashcards
Gross interest
Interest paid without tax deducted.
National living wage
The minimum that people aged 23 and over must be paid per hour by law.
National minimum wage
The minimum pay per hour to which workers are entitled by law. The rate depends on a worker’s age and whether they are an apprentice. It applies to workers aged under 23.
P45
A document legally required from an employer when an employee stops working for them. It summarises the employee’s
tax and National Insurance details for their next employer.
P60
A document prepared at the end of every tax year to show all the income tax and National Insurance contributions paid by an
individual during the preceding 12 months.
Self-assessment
A method used, often by self-employed people, to calculate the amount of tax and National Insurance they need to pay.
Self-employment
Earning an income by selling your goods or services directly to a consumer, rather than being employed by somebody else and
being paid a wage or salary.
Tax code
A code used by a person’s employer or pension provider to calculate the tax to deduct from pay or pension.
Tax paid at source
Tax deducted by the provider (on behalf of the government) from interest earned on savings. Since April 2016, providers no longer deduct income tax from savings interest at source.
Tax return
A tax form completed by people in certain situations (e.g self-employed people or employed people who receive money in
addition to their salary). It sets out details of income and expenditure and allows the taxpayer or HMRC to calculate the amount of tax and NI contributions owed.
