Reference

Glossary

Any figures or statements contained in the glossary are meant for general cases. Varying circumstances can introduce nuances in figures and rules.

A

Additional Rate: The final rate of income tax [45%] which is applied to income above £125,140.
Adjusted Net Income: HMRC's calculation of your income after pension contributions and charity gifts, used to test Child Benefit eligibility and taper allowances. - https://www.gov.uk/guidance/adjusted-net-income
Annual Allowance: The maximum tax-relievable pension contribution you can make in a tax year before taper rules reduce it for higher earners. - https://www.gov.uk/tax-on-your-private-pension/annual-allowance

Basic rate: The lowest rate of income tax [20%] which is applied to income above the personal allowance up to the Higher Rate limit [£12,571 to £50,270].

Higher rate: A higher rate of income tax [40%] than the basic rate which is applied to income between £50,271 and £125,140.

Personal Allowance: The amount of income you can earn each tax year before paying income tax.