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We've put together a list of common tax abbreviations so you can easily define extra information within the accounting context.
To help you out with the financial jargon (which is confusing enough without the acronyms) we've added in some extras terms which you may also come across outside of the tax tax related ones. Check out the full glossary of terms below.
ACT
Advance Corporation Tax
The prepayment of corporate taxes by companies in the United Kingdom that distributed dividend payments to shareholders.
APA
Advance Pricing Agreement
A system where the setting of transfer prices in specified transactions may be agreed with tax administrations in advance of the transactions being undertaken and reported.
BTL
Buy-to-let (BTL)
A property term or mortgage type typically for landlords who want to buy property to rent it out.
CA
Companies Act
It determines that recommended officers are required to perform their functions and exercise their duties to the standard of conduct as it applies to directors.
CAA
Capital Allowances Act
Determines the ability of a business to write off the cost of certain capital assets against taxable income.
CFC
Controlled Foreign Company
A foreign company is a CFC if it is a non-resident UK company that's controlled by a UK resident person or persons.
CG / CGT
Capital Gains / Capital Gains Tax
Capital Gains Tax is a tax on the profit when you sell (or 'dispose of') an asset which has increased in value.
CIF
Cost, Insurance, and Freight
An international shipping agreement, which only applies to goods transported via a waterway, sea, or ocean. It represents the charges paid by a seller to cover the costs, insurance, and freight of a buyer's order while the cargo is in transit.
COTAX
Company Tax (computer) System
COTAX is the Company Tax computer system that was introduced late 1999 to deal with the CT Self Assessment (CTSA) legislation.
CRS
Common Reporting Standard
This is a global standard for automatic exchange of information (AEOI) on financial account information between governments in order to combat offshore tax evasion and protect the integrity of taxation systems.
CT
Corporation Tax
Tax payable by companies, based on the taxable profits of the period.
CTPF
Corporation Tax Pay and File
The payment and filing of Corporation Tax.
DTA
Double Taxation Agreement
A double tax agreement effectively overrides the domestic law in both countries for the purposes of accurate taxation on paid interest.
EORI
Economic Operator Registration and Identification Number
An identification number required when moving goods between Great Britain and other specified locations.
ESC
Extra Statutory Concession
A relaxation which gives a taxpayer a reduction in tax liability or other favourable tax treatment to which they are not entitled to under the strict letter of the law.
FOREX
Foreign Exchange
Foreign Exchange (forex or FX) is the trading of one currency for another.
FID
Foreign Income Dividend(s)
Overseas dividends are those received from companies not resident in the UK.
FIFO
First In First Out
First In, First Out (FIFO) is an accounting method in which assets purchased or acquired first are disposed of first.
FRS
Financial Reporting Standards
These provide principles for preparing financial reports and determine the types and amounts of information that must be provided to users of financial statements, including investors and creditors, so that they may make informed decisions.
GAAP
Generally Accepted Accounting Practice
Generally Accepted Accounting Practice in the UK (UK GAAP) is the body of accounting standards published by the UK's Financial Reporting Council (FRC).
IT
Income Tax
An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them.
ITEPA
Income Tax (Earnings and Pensions) Act
An act that restated certain legislation relating to income tax "so as to make it clearer and easier to use".
ITTOIA
Income Tax (Trading and Other Income) Act
An act that restated certain legislation relating to income tax, with minor changes that were mainly intended "to clarify existing provisions, make them consistent or bring the law into line with well established practice."
NCD
Non-Corporate Distribution(s)
Profits that are distributed to a 'non-corporate' shareholder
NCDR
Non-Corporate Distribution Rate
The NCDR charge only arises when profits (broadly below the 50,000 threshold) are distributed to a 'non-corporate' shareholder.
NIC
National Insurance Contributions
Mandatory contributions which are paid into a fund, from which some state benefits are paid.
NPO
Non-Profit Organisation
NWT
Net Wealth / Worth Tax
PA
Partnership Act
The Partnership Act 1890 is an Act of the Parliament of the United Kingdom which governs the rights and duties of people or corporate entities conducting business in partnership.
PAYE
Pay-As-You-Earn
PE
Permanent Establishment
A fixed place of business (FPOB) in the UK where the business is wholly or partly carried out.
PIT
Personal Income Tax
SA
Self-Assessment
Self Assessment is a system HM Revenue and Customs ( HMRC ) uses to collect Income Tax.
SSAP
Statement of Standard Accounting Practice
This is a directive by which trading companies that are listed on the stock market must adhere to when constructing their financial reports. They form part of the Generally Accepted Accounting Practice, or GAAP, which is statutory in the United Kingdom through the Taxes Acts.
TCGA
Taxation of Chargeable Gains Act
TIEA
Tax Information Exchange Agreement
Mutual agreements under which territories agree to cooperate in tax matters through exchange of information.
They allow governments to enforce their domestic tax laws by exchanging information relevant to a tax matter covered by the arrangements.
VAT
Value Added Tax
A value-added tax (VAT), is a type of goods and services tax (GST),that is assessed incrementally.
WHT
Withholding Tax
Withholding tax is the money an employer deducts from an employee's gross wages and pays directly to the government. The amount withheld is a credit against the income taxes the employee must pay during the year.
If you have come across any others not listed here or with multiple potential definitions drop us an email at happytohelp@bluerocketaccounting.com and we'll be able to provide you with the accurate definition going by the financial transaction or document to which it relates. We're always happy to help!
