Jargon buster: tax

Add your own bits of jargon-busting down below in the comments section - the more confusing terms we can all demystify together, the quicker form-filling will be.

active: how HMRC refers to a company that's liable for corporation tax - generally, when it's trading and carrying out business activity (compare it with 'dormant')

agent: someone you appoint to deal with HMRC on your behalf for tax matters - such as an accountant or advisor

apportion: if you're a limited company and your tax accounting period straddles the boundary of a normal tax year (in other words, it runs over 1 April), and there are different corporation tax rates for either tax year, you pay the earlier tax rate on the amount of profit earned in that tax year, and the later tax rate on the profit earned in the second tax year. This process is called apportioning.

best estimate: the most accurate estimate you can make for a figure on your tax return you're not entirely sure of

capital gains tax: a tax charged on money made by the disposal, or sale, of an asset

chargeable gain: if you've sold an asset, this is the amount of profit you've made on the sale that HMRC can tax you on

close company: a company controlled by five or fewer people - but changing to any number of people if they're all directors

computation: the maths showing how you reached figures on your tax return, which you attach to it

corporation tax: the tax paid by limited companies on their profits

determination: if you don't send back your tax return, this is the estimate HMRC makes of what you owe. You'll also be fined

discovery assessment: an assessment issued by HMRC when it finds out that your Company Tax Return is wrong but it's too late to amend it; HMRC makes an assessment to collect the extra Corporation Tax your company should have paid

discovery determination: a determination made by HMRC when it finds out that your Company Tax Return is wrong but it's too late to amend it for an amount (such as a loss) that may affect the tax payable for another accounting period

dormant: the opposite of 'active' - how HMRC describes a limited company that is for some reason not liable for corporation tax

input tax: the VAT you charge other businesses or customers when they buy goods or services from you

marginal rate fraction: the fraction you use to calculate your marginal small companies relief, if you qualify for it

multiplier / poundage / uniform business rate (UBR): the amount you multiply your rateable value by to calculate how much you owe in business rates per year

output tax: the VAT other businesses charge you when you buy goods or services from them

rateable value: the amount your property is valued at for business rates purposes, as decided by the Valuation Office Agency and as listed in the VOA rating lists

VAT: value added tax, a tax charged on the value you add to items and services when you sell them

XBRL: eXtensible Business Reporting Language - the standardised language used for electronic business financial reporting

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