At MCO Accountancy, we understand that accounts and bookkeeping can be confusing. To help you out, here are some of the most commonly used words and phrases with brief explanations about what they mean.
If you’ve any queries at all please don’t hesitate to give us a call on 01444 801480.
- HMRC – Her Majesty’s Revenue & Customs (the tax man or lady)
- MTD – Making Tax Digital, a system being developed by HMRC whereby businesses will need to report quarterly. Initially only VAT registered businesses will need to comply in 2019, followed by self-employed individuals and landlords in 2020.
- VAT Threshold – The amount of turnover (not profit) at which point you must register for VAT. Currently set at £85,000. Some businesses sectors do not need to register. VAT can be complex so please ask for more details if required.
- Dividends – This is money paid to shareholders of a limited company or PLC. If you are running a limited company dividend’s may form part of your personal income for tax efficiency purposes.
- NI – National Insurance, also called ‘stamp’ for self-employed.
- Cloud Bookkeeping – A way of storing, sharing & accessing your accounts easily anywhere as your files are stored online. No need for backups.
- MLR – Money Laundering Regulations.
- Proof of ID – We need this from all new clients and consists of in date photographic ID and a recent utility bill.
- Certified Bookkeeper – A member of a bookkeeping body such as the International Association of Bookkeepers.
- Management accounts – a regular update on how your business is doing. These could be monthly, quarterly or as required.
- Benefit-in-Kind – A calculation used to determine the salary equivalent amount for a benefit received, e.g. a company car, health insurance…
- P60 – You’ll receive one of these every year, usually in April/May if you are employed. Keep it safe.