This form is issued when an employee stops working for an employer and is a record of how much salary was paid and the tax deducted in that tax year. If an employee doesn’t have a P45 form, for example if it’s their first ever job or if they start a second job without leaving their current one, then a P46 form must be supplied in place of a P45. 

 

This is a summary of all your pay and deductions, including tax and National Insurance contributions from a specific tax year. A tax year runs from 6th April through to 5th April the following year. 

 

When you enter into a business partnership, you share the responsibility for jointly running the business, including ownership of any assets and obligation of any losses. 

 

This is a record of the total partnership’s income, losses, credits and charges for each accounting period, and each partner’s share of them. 

 

This stands for Pay As You Earn and is a method of compulsory tax collection by the HMRC. An employer must deduct PAYE from the salary of anyone who is earning above the National Insurance Threshold. 

 

This comprises of P35 and P14 forms and is a combination of all your employees’ end-of-year payroll totals. It’s also known as an Employer Annual Return and is usually required to be filed online with the HMRC by the 19th May each year. 

 

This payment is made to the HMRC for those who pay their tax via the Self-Assessment method. If your self-passement tax bill is more than £1,000, then you will need to make a “payment on account” to the HMRC by the 31st July each year. The amount payable is half of your predicted tax total for the following year. 

 

These terms specify how many days you allow your clients to pay any amounts due to your business. 

 

Each time you pay yourself and/or any employees a salary, usually done monthly. 

 

PSC is a term that applies to your company if more than 50% of your income comes from the services performed by its shareholders under contract between the company and its clients. Not to be confused with Persons of Significant Control, see below. 

 

Also known as PSC (not to be confused with Personal Service Company, see above). Companies House requires every company to record each person who has significant control within that company. 

 

This insurance provides protection against a customer or client suing you for financial loss they believe was caused though your professional negligence. 

 

A report showing your businesses net profit and loss over a defined time period. When shown within your end of year accounts, this is known as an Income Statement. 

 

This test is carried out to determine if equipment was supplied by a contractor or their client. Can be used to determine IR35 status. 

 

This is any expense you incurred for work carried out for a client and can be recompensed by charging the client for it via an invoice. 

 

The net income retained in your limited company that hasn’t been paid out as a dividend. 

 

Employers are required to report all PAYE information to the HMRC in real time. To achieve this, they must send all relevant information electronically as part of their regular payroll process.