Glossary – U to Z
|Umbrella Company||A company that employs a temporary worker or contractor, often on behalf of an employment agency, which then provides services to that agency’s clients and customers. Often involved in IR35 / Off-Payroll issues.|
|Upper Earnings Limit||For high earners who are paid over this amount, the National Insurance rate falls. On earnings above this limit, the employee pays a lower rate, while the employer continues to pay at the same level.|
|UTR||Unique Tax-payer Reference, a ten-digit number which HMRC uses to identify a tax-payer within the self-assessment regime. Applies to all tax-payers including companies.|
|Valuation||The process of determining the fair value of an asset or business.|
|Variable Cost||A cost that changes over time or in line with the level of activity in a business.|
|VAT||Value Added Tax, a tax on spending, originally introduced in 1973.|
|VAT Annual Accounting Scheme||A scheme that allows the cumulative figures that are reported on a VAT return to be returned to HMRC once a year. Even though the Return is filed annually payments are made ten times a year.|
|VAT Cash Accounting Scheme||A scheme specifically for smaller businesses that allows them to declare only the VAT they have received or paid on the reporting period. Bigger businesses have to report on the basis of the amounts of VAT shown on invoices. A very advantageous system for the business’s cash flow.|
|VAT Flat Rate Accounting Scheme||This scheme allows you much simplified reporting for VAT Returns and can be to the business’s benefit but requires careful analysis before entering as there are very few deductions allowed.|
|Venture Capital||A type of finance given by private investors to startup companies and small high-growth businesses, it usually requires a repayment of the investment within three to five years together with a sunbstantial return on that investment.|
|Work in Progress||The work undertaken by a business by a reporting date that cannot yet be billed to the customer, it needs to be valued at sales price.|
|Worker||A specific type of person who provides their services for monetary reward, the term is required to determine what rights thay have in return for providing their services.|
|Working Capital||The money required by a business to enable it to continue to trade, the amount required by a business will vary enormously depending on how cash flows through the business.|
|Year End||The date on which a set of accounts is drawn up to, can also refer to the process undertaken to produce those accounts.|
|Zero Rate||A specific rate of VAT where you charge no VAT on to your customers or clients but are allowed to claim back VAT incurred in providing that good or service.|
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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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