Glossary – I to L


I

TermExplanation
ICAEWThe Institute of Chartered Accountants in England and Wales, the first Chartered body of Accountants, it was set up to promote the status of acountants and improve teir standing as a profession.
ICOThe Information Commissioner’s Office, a public body that deals with UK Data Protection matters.
Income TaxThe tax paid by individuals on their earnings or profits.
Indirect TaxesAny tax that is levied on what you spend rather than what you earn, a good example is Value Added Tax.
Inheritance TaxThe tax payable on the assets owned by a person when they die, colloquially known as Death Duties.
InsolvencyThe state of being unable to pay debts as they fall due.
Intangible Fixed AssetsItems that the company gains benefit from that aren’t represented by something physical, for example goodwill.
InvestigationsThe process that HMRC uses to determine whether the amounts disclosed on a Tax Return are correct or otherwise. (See also Fee Protection)
Invoice FinanceA way of obtaining funding based on invoices issued but not yet paid. If it is solely for sales invoices it is normally called factoring, but invoice finance can be provided in certain circumstances on purchase invoices.
IR35Inland Revenue Press Release 35, that setup the rules by which people working through a limited company can be forced to pay employment taxes (including National Insurance) on the earnings in that company. It was introduced in 1999 and has been superseded by the off-payroll rules.
IVAThe abbreviated version of ‘Individual Voluntary Arrangement’, an agreement entered into by an individual that sets out how they will pay back their debts over a period of time. The Arrangement has to be agreed with a majority (by value) of the people that are owed money by the individual.

J

TermExplanation
JournalsStrictly this is a detailed account that records all of the financial transactions of a business, but the term is more normally used today to refer to a method by which transactions are moved from one account to another within the businesses books.

K

TermExplanation
KPIsKey Performance Indicators, a way of identifying and measuring the performance of a business.

L

TermExplanation
Late Payment of Commercial Debts ActThe Late Payment of Commercial Debts (Interest) Act 1998 – An Act of Parliament that gives businesses the legal right to charge interest if their invoices aren’t paid on time by other business customers, whether included in their terms or not.
LiabilitiesAmounts owed by a business.
Limited CompanyA particular business structure that means the liabilities of the owners is limited to the amount they initially invested in the company. It is a separate legal entity; as a result of its special treatment selected details of the company must go on public record at Companies House.
Limited Liability PartnershipSimilar to Limited Company except the tax treatment is the same as for a normal partnership. As with a limited company details of the business are on public record at Companies House.
LiquidationThe process of winding up a limited company which can only be undertaken by a Liquidator who holds special qualifications to enable them to do so.
LossThe opposite of a profit, where in selling an item or service you receive less money that you spent to generate it.
Lower Earnings LimitApplicable to National Insurance. If you earn below the Lower Earnings Limited you make no National Insurance contributions, but earn no benefit rights. Beyond this limit you will be entitled to some basic benefits but won’t actually pay National Insurance until your earnings reach the Primary Threshold.

Back to Glossary

Why not take a look at these sections too, as there is some overlap between our categories and we’d hate you to miss out!

Limited Company

Tax

Management & Growth

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Can I just say we are so pleased that we have moved to Baranov Associates. As we discussed when you visited, we had to find a way to take the stress out of all of the financials and you’re doing that for us! We can see how to use Xero more efficiently and so with us being as on top of it as we can be and with you and Liz we feel a lot more confident about our business being in good shape.


Mrs S James, Sandbanks Capital Partners Limited

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