BQ Budget Glossary

BQ gives you a quick guide to some of the terms used in the Chancellor's budget.

Apprentice: a person who is learning a trade from a skilled employer, having agreed to work for a fixed period at low wages.

Bank levy: an annual tax on the value of all of the debts of the UK banks (including money deposited with the banks), except that:

  • ordinary deposits covered by the UK's deposit insurance scheme are exempt
  • borrowing backed by UK government debts is exempt
  • the first £20bn of any bank's taxable debts is exempt
  • the banks only pay half the tax rate on their long-term debts.

The government believed it would discourage banks from relying on risky forms of borrowing, which were blamed for making the 2008 crisis much more dangerous.

Budget surplus: A budget surplus occurs when tax revenue is greater than government spending. Therefore, the government can use the surplus revenue to pay off the national debt. 

Corporation tax: Companies are subject to corporation tax, which is levied on business profits and other forms of income, as well as on chargeable gains accruing to companies.

Devolution: the transfer or delegation of power to a lower level, especially by central government to local or regional administration.

Directly elected mayors: local government executive leaders who have been directly elected by the people who live in a local authority area. The powers of the mayor are commensurate with the kind of local authority for which they are the executive. See: https://en.wikipedia.org/wiki/Directly_elected_mayors_in_England_and_Wales

Dividend tax credits: Dividends are paid out of company profits on which the company has already paid or is due to pay Corporation Tax. The tax credit accounts for this and is available to the shareholder to offset against any Income Tax that may be due on their dividend income.

Enhanced annual investment allowance:  This is a kind of capital allowance, which offers tax relief at 100 per cent on qualifying expenditure in the year of purchase.

Inheritance tax: tax levied on property and money acquired by gift or inheritance, for example due to death. 

National debt: the total amount of money which a country's government has borrowed.

Non-dom: A non-dom is a UK resident whose permanent home, or domicile, is outside of the UK.

A domicile is usually the country his or her father considered his permanent home when he or she was born, or it may be the place overseas where somebody has moved to with no intention of returning.

That means somebody can be born, be educated and work in the UK but still hold non-dom status. It also means that some may inherit their non-dom status from their parents.

Key to non-dom tax status is that an individual must pay UK tax on UK earnings, but need not pay UK tax on foreign income or gains unless they bring that income back to the UK.

Welfare: statutory procedure or social effort designed to promote the basic physical and material well-being of people in need.