Glossary

Plain definitions of the tax, pay, contract and energy terms used across the site, with current figures and official sources.

Adjusted net income: Adjusted net income is your total taxable income less certain reliefs, such as grossed-up pension contributions and Gift Aid; HMRC uses it for several tests.
Annual allowance (pension): The annual allowance is the most that can go into your pensions each tax year before a tax charge applies: £60,000 for 2026/27.
Annual exempt amount: The annual exempt amount is the Capital Gains Tax allowance: the first £3,000 of gains each tax year is tax-free for individuals.
APP fraud reimbursement: APP fraud reimbursement makes UK banks refund victims of authorised push payment scams up to £85,000 for Faster Payments and CHAPS transfers made on or after 7 October 2024.
Auto-renewal: Auto-renewal is a contract term that starts a new contract period automatically unless you cancel before a deadline.
Capital Gains Tax: Capital Gains Tax is UK tax on the profit when you sell an asset that has risen in value; rates are 18% and 24% in 2026/27.
Chargeback: A chargeback asks your card provider to reverse a debit or credit card payment under Visa, Mastercard or American Express rules, usually within about 120 days.
Child Tax Credit: The Child Tax Credit cuts US federal tax by up to $2,200 per qualifying child under 17, with up to $1,700 refundable.
Cooling-off period: A cooling-off period is the 14 days UK law gives you to cancel most contracts made online, by phone or off-premises, without a reason.
Council Tax band: A Council Tax band is the valuation band, A to H in England, that sets a home’s share of the local Council Tax bill.
Council Tax Reduction: Council Tax Reduction is a means-tested scheme, run by councils, that can cut the Council Tax bill by up to 100% for people on low incomes or benefits.
Deadlock letter: A deadlock letter is a company's written final answer to your complaint, which lets you go straight to the ombudsman instead of waiting the usual 8 weeks.
Debt avalanche method: The debt avalanche pays the minimum on every debt and puts all spare money on the debt with the highest interest rate first.
Debt snowball method: The debt snowball pays the minimum on every debt and puts all spare money on the smallest balance first, whatever its interest rate.
Economy 7: Economy 7 is an electricity tariff with seven cheaper off-peak hours, usually overnight, and a dearer daytime rate; Ofgem assumes 42% of use falls off-peak.
Emergency tax code: An emergency tax code, marked W1, M1 or X, taxes each payday on its own, as if you were paid that amount every period of the year.
Energy price cap: The energy price cap is Ofgem’s limit on unit rates and standing charges for default tariffs; typical bill £1,723 from 1 October 2026.
FICA: FICA is the US payroll tax for Social Security (6.2% up to $184,500 in 2026) and Medicare (1.45%, plus 0.9% over $200,000).
Form W-4: Form W-4 is the IRS form you give your employer so it withholds the right federal income tax from your pay.
High Income Child Benefit Charge: The High Income Child Benefit Charge claws back 1% of Child Benefit for every £200 of adjusted net income over £60,000, and all of it at £80,000.
Higher rates for additional dwellings (stamp duty surcharge): The higher rates add 5% to every Stamp Duty Land Tax band in England and Northern Ireland when a purchase leaves you owning more than one home.
Marginal tax rate: Your marginal tax rate is the share of your next pound or dollar of income that goes in tax and deductions.
National Insurance: National Insurance is a UK tax on earnings that builds State Pension entitlement; employees pay 8% between £12,570 and £50,270 and 2% above in 2026/27.
Net pay arrangement: A net pay arrangement takes your workplace pension contribution out of pay before Income Tax is worked out, giving relief at your top rate automatically.
Notice period: A notice period is the time between telling the other party you are ending a contract and the date it actually ends.
OAS recovery tax (clawback): The OAS recovery tax, or clawback, takes back 15% of net income above $93,454 (2025 income) from your Old Age Security pension.
Ombudsman: An ombudsman is a free, independent body that settles complaints against companies or public bodies once the organisation has had its chance to put things right.
P11D: A P11D is the form UK employers send HMRC by 6 July to report each employee's taxable benefits and expenses that were not taxed through payroll.
P45: A P45 is the form your employer gives you when you leave, showing your leaving date, pay and tax so far in the tax year, and your tax code.
P60: A P60 is the yearly summary of your pay and tax from one employer, due by 31 May if you work there on 5 April.
Payment in lieu of notice (PILON): A payment in lieu of notice (PILON) is basic pay for a notice period you do not work; it is fully taxed and subject to National Insurance.
Personal Allowance: The Personal Allowance is the income you can earn each UK tax year before Income Tax starts: £12,570 for 2026/27.
Phishing: Phishing is a scam email, text or call designed to trick you into visiting a fake website, giving away personal or bank details, or installing malware.
Regulation E: Regulation E is the US federal rule that limits your liability for unauthorized debit card and electronic transfers to $50 or $500 if you report them in time.
Relief at source: Relief at source is how personal pensions get basic rate tax relief: you pay £80, your provider claims £20 from HMRC, and £100 goes in.
Salary sacrifice: Salary sacrifice is an agreement to give up some cash pay for a non-cash benefit, often a pension contribution, cutting Income Tax and National Insurance.
Section 75: Section 75 of the Consumer Credit Act 1974 makes your credit card provider jointly liable with the seller for a single item costing over £100 and up to £30,000.
Single person discount: The single person discount takes 25% off your Council Tax bill when you are the only adult counted as living in your home.
Standard deduction: The standard deduction is the fixed amount US taxpayers subtract from income before federal tax: $16,100 single, $32,200 joint for 2026.
Standing charge: A standing charge is the fixed daily amount on an energy bill, paid whatever you use; the capped average is 54.83p a day for electricity.
State Disability Insurance (SDI): State Disability Insurance is a payroll deduction that funds short-term disability and paid family leave; California takes 1.3% of all wages in 2026.
Tax code: A UK tax code tells your employer or pension provider how much tax-free pay to give you; 1257L, meaning £12,570, is the most common.
Typical domestic consumption values (TDCVs): Typical domestic consumption values are Ofgem's yearly usage figures for a typical home, 2,500 kWh electricity and 9,500 kWh gas from 1 July 2026.