Glossary – M to P
M
| Term | Explanation |
|---|---|
| Management Accounts | Accounts produced purely for management purposes, on a more frequent basis than annually, usually monthly or quarterly although some retail business produce weekly information. |
| Management Information | A package of reports for the management to consider on a regular basis to see if the business is performing to expectations, it will include management accounts. |
| Micro Companies | Limited companies with turnover of below £630,000 in a year, a balance sheet total of under £316,000 and less than 10 employees. |
| MTD | Making Tax Digital, the Government’s ongoing scheme to make tax reporting and assessing a purely digital process . |
N
| Term | Explanation |
|---|---|
| National Insurance | A fundamental component of the welfare state in this country. Whilst it is a tax payments are actually called contributions and they entitle you to various state benefits such as the State Pension or Employment Allowance. |
| National Association of Commercial Finance Brokers (NACFB) | The UK’s largest independent trade body for commercial finance brokers. The Association comprises over 1800 commercial finance brokers covering the whole of the UK. |
| National Living Wage | A mandatory minimum wage payable to workers over the age of 23. It is expressed as an amount per hour worked and changes every year. |
| National Minimum Wage | An obligatory minimum wage payable to workers over the the school leaving age but under 23. It is expressed as an amount per hour worked and changes every year. |
| Net Assets | The value of a business’s assets minus all its liabilities. |
| Net Book Value | The value of an asset after the original cost has been reduced by depreciation or amortisation, this is the estimated value of that asset at a particular point in time on the basis of how it has been used rather than its market value. |
| Net Current Assets | The current assets of a business less the value of its current liabilities. It is a rough measure of how easy it is for that business to carry on paying debts as they fall due. |
| Net Profit | The profit made by a business after deducting all the costs relevant to that period and those sales made. |
| New Starter Checklist | Replacing Form P46, this enables employers to gather all necessary information from a new start employee to add them to the payroll. |
O
| Term | Explanation |
|---|---|
| Open Banking | An Initiative by the Competitions and Markets Authority to allow regulated financial companies limited, secure access to customer’s banking affairs to enable them to provide better services. |
| OTS | The Office of Tax Simplification – established on 20 July 2010 as an independent adviser to the UK Chancellor of the Exchequer, providing advice on the simplification of the tax system. |
| Outsourced FD | Also known as Outsourced Finance Director. Our service to provide a business that doesn’t currently have that level of internal knowledge or expertise with regular high-level financial input and strategy advice. |
| Overheads | Costs in a business that aren’t directly related to the product or service you are selling, sometimes also known as expenses. |
P
| Term | Explanation |
|---|---|
| P11D | A form for submission to HMRC that details the benefits received by Directors or Employees from a Limited Company in the year to 5th April each year. Completed annually, these must be submitted by the 6th July, and provided to employees by the 31st July. |
| P46 | Now replaced by the New Starter Checklist. |
| P46(Car) | A form to provide HMRC with details relating to changes to the provision of a company car. |
| P60 | A form provided to an employee at the end of the tax year that shows their earnings and the taxes paid during a tax year. |
| Partners | The individuals that have entered into a partnership agreement. |
| Partnership | A business structure where more than one party come together with a view of doing business together. The regulation of a partnership is controlled by one of the oldest laws on the statute book, The Partnership Act 1890. |
| PAYE | Pay as You Earn, the method by which Income Tax and National Insurance are calculated and deducted each time an employee receives pay. |
| Payroll | The regular process of calculating the amount payable to an individual after the application of the PAYE rules and producing the legally required forms and reporting. |
| Penalties | A fine levied for wrong-doing, normally the late production or submission of a legally required report or form, also applies in some case to late paid taxes on top of interest being charged. |
| Pensions | The regular payment of amounts by either the Government or a pension provider to a person over pensionable age for their entitlement or savings in a retirement fund. |
| Personal Guarantees | Sometimes given to lenders when borrowing sums for a business, this is a form of guarantee to the lender that states if the borrower cannot repay the sums due, the individual will do so in their place. |
| Phishing Scams | A fraudulent message designed to trick a person into passing money or sensitive information to someone who is not entitled to it. An ever increasing problem, we recommend that all instance of phishing should be reported to the authorities. |
| Preferential Creditor | A creditor who gets paid first during an insolvent liquidation. HMRC have regained this status in the UK. |
| Prepayments | An accounting tool to move payments made at the start of a periodic service to the correct periods when the service is used, for example spreading the cost of an annual insurance premium over the next 12 months. |
| Profit | The amount of money made by a business after deducting their costs. There are normally two types of profit measure, Gross Profit and Net Profit. |
| Profit & Loss | A summary of all income and expenditure for a buiness, usually reported at the end of a trading period or the year. |
| PROOF | PROtected Online Filing is a free service provide by Companies House that is designed to protect a company from unauthorised or fraudulent change and utilises an Authentication Code known only to the Directors and their trusted advisors. |
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Related Info
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.
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