Common Terminology

• VAT is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. It is levied on the added value that results from each exchange.
• PAYE is a system used by HM Revenue and Customs in the United Kingdom to collect income tax and National Insurance contributions from employment. It is deducted directly from the employee’s salary.
• National Insurance Contributions (NICs) are a tax on earnings paid by employees. They fund state benefits such as the State Pension, Jobseeker’s Allowance, and Maternity Allowance.
• Corperation tax is a tax imposed on the net income of a corporation o similar entity. Many countries impose such a tax at the national level, and a similar tax may be imposed at state or local levels.