Tax and accounting words, in plain English.

CIS

The Construction Industry Scheme. A contractor takes money off a subcontractor's pay for construction work and passes it to HMRC as an advance payment towards the subcontractor's tax and National Insurance. More

CIS300

A contractor's monthly CIS return to HMRC, listing the payments to subcontractors and the deductions. Due by the 19th after each tax month ends, nil returns included. More

Contractor

Under CIS, a business that pays subcontractors for construction work. A mainstream contractor's business is construction; a deemed contractor's is not, but it has spent more than £3 million on construction in the 12 months since its first payment. More

Deduction rate

What a contractor takes off a subcontractor's labour: 20% if they are registered, 30% if not, nothing with gross payment status. More

Dividend allowance

The first £500 of dividends in a tax year, taxed at nothing - though it still uses up part of your tax band. More

Finance costs

Mortgage interest and other costs of borrowing for a let property. For a residential landlord they give a 20% tax reduction rather than being taken off the profit. More

Gross payment status

CIS status that lets a subcontractor be paid in full with nothing taken off, granted by HMRC to a business that passes its tests. More

Making Tax Digital (MTD)

HMRC's rules for keeping digital records and sending updates through software: for VAT, and for Income Tax from 6 April 2026 for people with self-employment and property income over the threshold. More

Marginal relief

A reduction in Corporation Tax for a company with taxable profits between £50,000 and £250,000, so its rate rises gradually from 19% to 25%. More

Nil return

A CIS300 showing no payments to subcontractors, sent for a tax month in which none were paid, unless HMRC has been told you are inactive. More

Payment and deduction statement

What a contractor must give a subcontractor within 14 days of the end of each tax month in which it took CIS off them: the subcontractor's proof the tax was taken. More

Payments on account

Two advance payments towards next year's Self Assessment bill, each half of last year's, due 31 January and 31 July. More

Personal allowance

The income you can have each year without paying Income Tax: £12,570, reduced by £1 for every £2 of income over £100,000. More

Qualifying income

For Making Tax Digital for Income Tax, your self-employment and property income before expenses, which decides whether and when MTD applies to you. More

Quarterly update

Under Making Tax Digital for Income Tax, a summary of your income and expenses sent to HMRC from your software four times a year. More

Reverse charge

The VAT domestic reverse charge for construction: between VAT registered businesses in CIS, the customer accounts for the VAT instead of paying it to the supplier, unless they are the end user. More

Tax month

Under CIS and PAYE, the 6th of one month to the 5th of the next. More

Trading allowance

£1,000 of self-employed income a year that is tax free, or that can be taken off your takings instead of your actual costs. More

UTR

Unique Taxpayer Reference: the ten-digit number that identifies you, or your business, to HMRC. More

Verification

A contractor checking a new subcontractor with HMRC before paying them, which tells it the rate to deduct. More

Every definition is a summary of HMRC's rules on GOV.UK, not advice. The guides and calculators linked from each one set out the detail, with their sources.