Topic 12 key terms(earnings)

Question 1

benefit

Answer 1

definition: government payment made to individuals who meet specific
conditions to help them meet their living expenses

Question 2

budget

Answer 2

definition: plan of expected incomings and outgoings over a set time period such as a month

Question 3

chancellor of the exchequer

Answer 3

definition: British Cabinet minister responsible for financial and economic matters and in charge of the Treasury

Question 4

dividend

Answer 4

definition: A payment of profits from a company to its shareholders, often at twice-yearly intervals, either as cash or further shares or reacquisition of shares

Question 5

gross interest

Answer 5

definition: Interest paid without tax deducted

Question 6

HM revenue and customs

Answer 6

definition: The government department that collects various taxes, Formerly the Inland Revenue

Question 7

income

Answer 7

definition: Earnings, savings and interest payments received within a certain time frame

Question 8

income tax

Answer 8

definition: Tax paid on earnings from employment, self-employment and interest on savings

Question 9

individual savings account

Answer 9

definition: An account that pays interest tax-free on savings up to a certain level,cash ISAs and stocks and shares ISAs as well as Junior ISAs are available

Question 10

interest

Answer 10

definition: Money either paid to an account holder by the provider, or
charged to the account holder by the provider,interest is paid on savings accounts and some current accounts and charged on borrowing

Question 11

investment

Answer 11

definition: Money paid into financial products; the aim is that the value of
the product will grow over time and so the person will eventually receive back more money than they paid in

Question 12

junior ISA

Answer 12

definition: Junior ISAs are long-term savings accounts set up by a parent or
guardian specifically for the child’s future

Question 13

Mortgage

Answer 13

definition: loan taken out to pay for a property, usually over a long term

Question 14

National insurance contributions

Answer 14

definition: Money deducted from the pay of people who are employed or self-employed and used by the government to fund state pensions and other benefits.

Question 15

national living wage

Answer 15

definition: minimum that people aged 23 and over must be paid per hour by law. The national minimum wage applies to workers aged under 23.

Question 16

national minimum wage

Answer 16

definition: minimum pay per hour to which workers are entitled by law, rate depends on a worker’s age and whether they are an apprentice,applies to workers aged under 23.

Question 17

p45

Answer 17

definition: document legally required from an employer when an employee stops working for them summarises the employee’s tax and National Insurance details

Question 18

p60

Answer 18

definition: document prepared at the end of every tax year to show all the income tax and National Insurance contributions paid by an individual durinq the preceding 12 months.

Question 19

pension

Answer 19

definition: income that people receive after retiring from work,in the UK
people receive a pension from the state or private

Question 20

personal allowance

Answer 20

definition: The amount of income you are allowed to earn before you become liable for income tax

Question 21

personal savings allowance

Answer 21

definition: amount of savings interest that can be earned before the saver pays tax

Question 22

self-assessment

Answer 22

definition: method used, often by self-employed people, to calculate the
amount of tax and National Insurance they need to pay

Question 23

self-employment

Answer 23

definition: Earning an income by selling your goods or services directly to a
consumer, rather than beinq employed by somebody else and being paid a wage or salary

Question 24

starting-rate band

Answer 24

definition: amount of savinqs that an individual can ear tax-free it their total income is less than the personal allowance

Question 25

taxable income

Answer 25

definition: Income on which tax must be paid - that is, after deducting allowances and any permitted expenses from the total income earned.

Question 26

tax band

Answer 26

definition: category of income on which a specific rate of tax is payable

Question 27

tax code

Answer 27

definition: code used by a person’s employer or pension provider to
calculate the tax to deduct from pay or pension

Question 28

tax paid at source

Answer 28

definition: Tax deducted by the provider
from interest earned on savings

Question 29

tax return

Answer 29

definition:sets out details of income and
expenditure and allows the taxpayer or HMRC to calculate the amount of tax and NI contributions owed.

Question 30

tax year

Answer 30

definition: known as the financial year, the tax year runs from 6 April to 5 April in the following year,tax people owe is calculated according to how much they have earned April to April rather than January to December

Question 31

zero-hour contract

Answer 31

definition: A type of employment contract that does not set out a fixed
number of hours that an employee must work and be paid for