Glossary
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Limited Company
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A separate legal entity incorporated with Companies House.
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PAYE
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Pay as your Earn (PAYE), is a tax on income deduced at source by employers on behalf of HMRC.
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NI
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National Insurance (NI) contributions are made based on earnings or profit. The name was adopted to distinguish it from general taxation. NI contributions provide for State Pension, unemployment pay and incapacity benefits.
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VAT
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Value Added Tax (VAT) is an end user tax added to all products or services sold. Output VAT is added to invoices and collected on behalf of the government. Input VAT is what is paid to supplies. The difference Output VAT less Input VAT is required to be paid quarterly to HMRC.
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FRV
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Flat Rate VAT (FRV) is a special agreed fixed percentage rate of turnover, that takes no account of Input VAT used to calculate the amount of VAT owed to the governmen.
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Corp Tax
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Corporation Tax is a tax levied on companies based on company profits.
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Employer Annual Returns (P35)
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Employer's annual returns or P35 lists all NI and PAYE paid over by the company on behalf of each employee.
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Annual Financial Accounts
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Annual Financial Accounts are also referred to as Company Accounts or Annual Accounts and include an income statement, a balance sheet and a directors report. The Annual Financial Accounts need to be submitted to HMRC and Companies House.
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Expenses
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Expenses that arise during the discharge of company business that are wholly and exclusively for the business that, have been paid for personally. These expenses can be claimed back from the company. Expenses paid out by the company reduce the company profit and corporation tax liability.
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Dividends
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Payments made by a company to its shareholders from company profits.
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Reimbursable Expenses
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Expenses that arise during the discharge of contracted duties that the client has agreed to pay and can therefore be re-charged to the client or added to an invoice. Reimbursable expenses are normally recorded in the contract.
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HMRC
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Her Majesties Revenue and Customs (HMRC), is primarily responsible for the collection of taxes.
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Companies House
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The UK Registrar of Companies where all forms of companies are incorporated and registered. Each registered company is required to file Annual Financial Accounts and Annual Shuttle Returns (ASR) with Companies House.
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ASR
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Annual Shuttle Returns (ASR) are required to be filed annually with Companies House with details of directors, secretary, registered office, share capital and shareholding.
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Still unsure about something? Why not check out our FAQ section ,designed to answer
your small business accounting questions.