A Concise Dictionary of British Taxation

A private members’ establishment occupying the salaries between £100,000 and £125,140. There is no bar, no lounge and no annual fee; the fees are the point. Admission is automatic and unannounced. Resignation is possible, but only through the pension door. Members are asked not to discuss the Club, and don’t — which is how it survives.

The 62% Club’s high-rise extension, for members who also went to university after 2012. The 71st floor adds 9p in the pound for the student loan, which attends every meeting; the 77th, reached by master’s degree, adds 6p more for the postgraduate loan. Of each pound earned at altitude, between 29p and 23p survives the lift down. Dress code: academic.

Where the company director settles up for having dared to make a profit. A pound of profit pays corporation tax on arrival and dividend tax at the door — roughly 52p in all at the higher band, 55p at the top — where the same pound, earned as plain salary, would have paid 42p or 47p. An eight-to-ten-point surcharge for owning the place. Redecorated this April: two percentage points dearer throughout, a refurbishment nobody requested and every member is paying for.

Your income, adjusted. The number that decides your allowance, your childcare and your child benefit, produced by a formula that appears on no payslip you will ever be handed. Not your salary, not your taxable income, not your take-home: a fourth number — and the only one the cliffs can see.

A sum awarded for exceptional performance, and taxed for the same reason. The leading cause of getting cliffed (q.v.). Best opened near a pension.

HMRC’s preferred medium of surprise. Contents may include a new tax code, an old mistake, or an invitation to pay next year’s tax slightly before you were planning to earn it.

The portion of your next pay rise that was never coming to you. Between £100,000 and £125,140, a controlling interest: 62p in the pound, before any student loan is considered.

An informal association of households earning £99,000-and-something. Members decline pay rises, defer bonuses and prune adjusted net income like bonsai, because the view one step on — more than ten thousand pounds of childcare, gone, for a single pound — is best appreciated from exactly here. Meetings are held at £99,500 and never adjourn upward.

“We can’t take the promotion until April. Society rules.”

To have received a pay rise that left your household poorer. Most commonly recorded at £100,000, where one additional pound of income can remove more than ten thousand pounds of childcare support.

“They gave me two thousand. We’ve been cliffed.”

Of tax arrangements: legal, published openly on GOV.UK, and somehow never mentioned to you.

The raising of taxes without the raising of taxes. The thresholds hold perfectly still; inflation walks you into them. Named for the sensation. The personal allowance has agreed to remain £12,570 until 2031.

The 31st of January, on which self-assessment collects last year’s balance and half of next year’s estimate in a single visit. Others give something up for January; the self-employed give roughly twice. The only month containing two tax years, and it shows.

Of money: legally retained by means of a relief nobody mentioned to you. Also the name of a tool that shows you where the reliefs are — the compilers declare an interest. Recorded uses are rare, but rising.

The tax on your next pound, as distinct from your last one. The most useful number in personal finance, printed on no official document. At certain incomes it exceeds the headline top rate by a margin best described as brisk.

The dawning suspicion, usually at a dinner party, that everyone else was told about all this years ago. Highly prevalent. Treatable.

The first £12,570 you earn each year, tax-free — a courtesy withdrawn at £1 for every £2 you earn over £100,000, on the grounds that you were doing rather too well. Fully confiscated by £125,140, at which point the system relaxes and charges you merely 47%.

The act of giving up salary in order to keep more of it. Not a paradox; arithmetic.

An annual examination in which you set the paper, sit the paper, and mark the paper, and can still fail. Late arrival: £100, rising.

The shareholder who appears on no register. Draw a company’s profit past £125,140 and the combined take — corporation tax at 25%, then dividends at 39.35% — reaches roughly 55p in the pound, at which point the state holds a majority interest while attending none of the meetings. Contributes no capital; misses no distribution.

A defined-benefit arrangement: index-linked, guaranteed for life, backed by the taxpayer, and largely unavailable to the taxpayer backing it. The most generous tax break in the system — routinely transferring 30% or more of pay, untaxed — and available exclusively to the sector that administers the system. A coincidence, of course.

The rule by which a household with two salaries of £59,000 — £118,000 in all — keeps every penny of its child benefit, while a household with one salary of £80,000, and a parent at home, returns the lot. Assessed on the higher earner alone, at 1% per £200 between £60,000 and £80,000, and collected the following January, by which point it has generally been spent.

A short string of characters that determines your monthly income, issued without explanation and revised without warning. 1257L is standard issue. Anything beginning with a K deserves a quiet sit-down.