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Reference

Tax & MTD glossary.

Every term you'll meet in Making Tax Digital and Self Assessment, explained in plain English.

MTD ITSA / MTD for Income Tax
Making Tax Digital for Income Tax Self Assessment. HMRC's system requiring sole traders and landlords above an income threshold to keep digital records and report quarterly, instead of filing one annual return. See our full explainer.
Quarterly update
A digital summary of your business income and expenses for a three-month period, sent to HMRC through MTD software. You send one for each of the four quarters in a tax year. The figures are cumulative running totals, not final amounts. See how to submit one.
Final declaration (crystallisation)
The year-end submission that brings together all your income and confirms it is complete and correct, finalising your tax position for the year. Under MTD it replaces the old annual Self Assessment tax return. "Crystallisation" is HMRC's technical name for the same thing.
Obligation
A reporting task HMRC expects from you for a given period — for example a specific quarterly update or final declaration — each with its own deadline and status (open or met). EasyTaxer fetches your obligations from HMRC and tracks them for you.
BSAS (Business Source Adjustable Summary)
A summary HMRC produces of the income and expenses for a particular business source, which can be adjusted for year-end accounting changes. It's part of how figures are finalised for a self-employment or property business.
Cumulative submission
An approach where each quarterly update reports the year-to-date totals rather than just that quarter's figures. A later update can therefore correct an earlier one, because it restates the running total.
Consolidated expenses
Reporting your total allowable expenses as a single combined figure rather than itemising each category. HMRC allows this below a turnover threshold to simplify reporting.
FHL (Furnished Holiday Letting)
A rental property that meets HMRC's conditions for furnished holiday lettings, which historically had its own tax treatment distinct from ordinary property income. Always check the latest rules, as the treatment of FHLs has changed.
NINO (National Insurance number)
Your unique personal reference for National Insurance and tax, in the form two letters, six digits, one letter (e.g. QQ123456C). EasyTaxer uses it to identify you to HMRC.
UTR (Unique Taxpayer Reference)
A ten-digit reference HMRC issues when you register for Self Assessment. It identifies your tax record and appears on HMRC correspondence.
Accounting period
The period your business accounts cover. For MTD for Income Tax, most sole traders and landlords align to the tax year (6 April to 5 April).
Cash basis vs accruals basis
Two ways of accounting for income and expenses. Cash basis records money when it actually moves (received or paid). Accruals basis records it when it's earned or incurred, regardless of when cash changes hands. Many small businesses use the simpler cash basis.
AIA & capital allowances
Capital allowances let you deduct the cost of certain business assets (like equipment) from your taxable profit. The Annual Investment Allowance (AIA) lets you deduct the full cost of qualifying items, up to a yearly limit, in the year you buy them.
HICBC (High Income Child Benefit Charge)
A tax charge that can apply if you or your partner receive Child Benefit and one of you has income above a set threshold. It's reported through Self Assessment / your final declaration.
CIS (Construction Industry Scheme)
A scheme where contractors deduct money from subcontractors' payments and pass it to HMRC as advance payments towards the subcontractor's tax and National Insurance. EasyTaxer handles CIS deductions for subcontractors.
Qualifying income
Your combined gross (pre-expenses) income from self-employment and property in a tax year. HMRC uses it to decide whether — and from which phase — you must follow MTD for Income Tax.
Government Gateway
HMRC's online sign-in system. You use your Government Gateway user ID and password to authorise EasyTaxer to connect to HMRC — on HMRC's own site, so we never see your password.
ARN (Agent Reference Number)
A reference HMRC gives to authorised tax agents. Accountants use it when they register an agent account to act for clients.

Still have questions?

Start with our plain-English explainer of Making Tax Digital for Income Tax.

Read the MTD explainer