Glossary of terms

This glossary explains words and phrases used in this guide. For more detailed and comprehensive explanations seeread the legislation or the following HMRC publications.

Approved mileage allowance payments

This is the maximum amount per mile that can be paid tax-free and National Insurance contributions-free to someone who uses their own vehicle for work.

Board and lodging

This is term for food and accommodation used by an employee working abroad. It’s not used for any other purpose in this guide.

Business journey

Any journey:

• necessarilytaken undertakenwhich inrelates theto performanceemployment ofduties thecarried employee’s dutiesout
• to or from a place the employee hasmust to attend into thecarry performanceout oftheir the duties of the employment, and excluding ordinary commuting

Cash equivalent

The measure of the taxable amount where employees are provided with benefits in kind. Read more about Expenses and benefits: A to Z.

Company car

A car made available (without the transfer of property in it) to:

• an employee
• a member of an employee’s family or household by reason of the employee’s employment, which is available for private use — seeread paragraph‘Company 5.18cars ofand vans’ in Business journeys tax relief (490: Chapter 5) .

Credit token

A credit card or other token which gives rise to a charge to tax under section 94 Income Tax (Earnings and Pensions) Act (ITEPA) 2003.

Dispensation

A notice given to an employer where an officer of HMRC is satisfied that no Income Tax is payable in respect of certain specified expenses payments and benefits. Dispensations ceased to have effect from 6 April 2016.

Domicile

This is the country where, in law, a person is regarded as having their permanent home. See leaflet residence, domicile and the remittance basis: RDR1.

Duties

The tasks an employee hasmust to carry out in doing their job. The duties of a particular job are determineddecided by the objective requirements of the job.

Earnings

The income of an individual who holds an office or employment. They include all salaries, fees, wages, profits and incidental benefits of any kind. Read sectionEmployment 62Income ITEPAManual 2003.— earnings from an office or employment.

Employment income

The part of the Taxes Act under which tax is charged on income from offices or employments. Read section 6(1) ITEPA 2003.

Fuel benefit charge

The measure of the taxable benefit where an employee is provided with fuel for a company car. SeeRead paragraph‘Company 5.18cars ofand vans’ in Business journeys tax relief (490: Chapter 5).

Full cost

The full cost of a business journey is the total expense incurred when an employee makes a business journey. It includes the cost of necessary subsistence but does not include incidental overnight expenses.

Full Payment Submission

A Full Payment Submission (FPS) is the form completed by employers to report PAYE payments as part of a Real Time Information (RTI) submission

Incidental overnight expenses

Personal expenses which are incidental to an overnight stay on business or on work-related training. See Read paragraphs‘Incidental 8.2overnight toexpenses’ 8.6in ofTax the tax rules on other types of travel and related expenses (490: Chapter 8).

ITEPA

Income Tax (Earnings and Pensions) Act 2003.

Ordinary commuting

Travel between an employee’s permanent workplace and home, or any other place where the employee’s attendance is not necessary for the performance of the duties of that employment. SeeRead paragraphs‘Ordinary 3.2commuting’ toin 3.7Ordinary of ordinary commuting and private travel (490: Chapter 3).

P11D

A form employers complete giving details of benefits in kind and expenses payments made to employees who, taking into account the value of those benefits, earn £8,500 or more per year. (ThereThere is a shorter form, P9D, for employees who earn less than £8,500 per year.)year.

P11D(X)

An application form for a dispensation.

P45

A form employers complete when an employee stops working for them showing details of the amount paid and tax deducted under PAYE in the tax year. The employee gets a copy of these details on form P45(1A).

P60

A form employers complete at the end of the tax year showing details of the amount paid and tax deducted under PAYE.

P87

A form to help people, who do not get a tax return, to claim tax relief for job expenses. Employees can ask for this, or an HMRC office may issue it.

PSAs

An annual agreement between an employer and HMRC under which the employer settles in a single annual payment the Income Tax liability on minor or irregular expenses and benefits provided to employees. SeeRead paragraphs‘Expenses 10.10for topaid 10.12or ofreimbursed expensesexpenses’ in Expenses exemption and PAYE Settlement Agreements (490: Chapter 10).

Permanent workplace

Any place which an employee regularly attends in the performance of the duties of the office or employment but which is not a temporary workplace. SeeRead paragraph‘Permanent 3.10workplace’ ofin Ordinary commuting and private travel (490: Chapter 3).

Private travel

Travel between an employee’s home and any place that is not a workplace or between any 2 places that are not workplaces. SeeRead paragraph‘Private 3.8travel’ ofin Ordinary commuting and private travel (490: Chapter 3).

Private use

Use of a car or van for journeys other than business journeys.

Qualifying new resident 

When an individual first comes to, or returns to, the UK, they are a qualifying new resident for a tax year if they meet all of the following criteria:

• they are UK resident in the tax year
• they have not been UK resident for at least 10 consecutive tax years immediately before the tax year
• they are not a member of the House of Commons or House of Lords for any part of the tax year

For subsequent years an individual is a qualifying new resident for a tax year if they meet all of the following criteria:

• they are UK resident in the tax year
• the tax year is one of the 3 tax years immediately following the first tax year in which an individual was a qualifying new resident
• they are not a member of the House of Commons or House of Lords for any part of the tax year

Find out more about qualifying resident in manual RFIG44000.

Resident

An employee must normally be physically present in a country to be resident there. An employee will always be resident in the UK if they’re here for 183 days or more in the relevant tax year.

For detailsmore ofinformation read the Statutory Residence Test see leaflet RDR3.

Round sum allowance

A payment made to employees who make business journeys where the amount paid is a flat rate rather than a reimbursement of actual expenses incurred or a scale rate payment.

Scale rate

An allowance paid to employees who make business journeys where the allowance is based on, for example, a fixed amount for each mile travelled or a fixed amount for each night spent away on business.

Subsistence

Meals or accommodation that are necessary as a result of making a business journey. Subsistence does not include incidental overnight expenses. SeeRead paragraphs‘Subsistence’ 5.4in to 5.7 of Business journeys tax relief (490: Chapter 5).

Tax year

The tax year runs from 6 April in one year to 5 April in the next.

Temporary workplace

A place which an employee attends in the performance of the duties of their employment and for the purpose of performing a task of limited duration or for some other temporary purpose. SeeRead paragraph‘Temporary 3.13workplace of— theattendance ordinaryfor a limited duration or temporary purpose’ in Ordinary commuting and private travel (490: Chapter 3).

Vouchers

All vouchers which give rise to a tax charge under sections 81 and 87 ITEPA 2003. Vouchers include travel tickets.

Workplace

A place where an employee’s attendance is necessary in the performancecarrying out of thetheir duties of their employment.