Running a business in the UK often means navigating a maze of financial, legal, and tax-related terms. To make things easier, we’ve created this Business Glossary with over 65 essential definitions tailored for UK companies. Whether you’re a start-up founder, a small business owner, or part of a growing organisation, this glossary explains the jargon in plain English.
A
Accounts Payable
Money a business owes to suppliers for goods or services received.
Accounts Receivable
Money owed to a business by its customers for goods or services supplied.
Angel Investor
An individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.
Annual Return
A yearly statement delivered to Companies House containing details of a company’s structure.
Apprenticeship Levy
A tax on large UK employers used to fund apprenticeship training.
Articles of Association
A legal document that sets out the rules for running a UK company, agreed by shareholders and directors.
Assets
Items of value owned by a business, such as property, equipment, or cash.
Auto-Enrolment
A requirement for UK employers to automatically enrol eligible staff into a workplace pension scheme.
B
Balance Sheet
A financial statement showing a company’s assets, liabilities, and equity at a specific point in time.
Bankruptcy
A legal process when an individual or business cannot repay outstanding debts.
Bookkeeping
The recording of financial transactions in a business.
Break-even Point
The point where a business’s revenues equal its costs, resulting in neither profit nor loss.
Burn Rate
The rate at which a company is spending its capital to finance overheads before generating positive cash flow from operations.
Business Bank Account
A dedicated account used by businesses to manage income, expenses, and company finances.
Business Plan
A document outlining a company’s goals and the strategy to achieve them.
Business Rates
A local tax charged on business premises such as offices, shops, and warehouses.
C
Capital
Financial resources used to fund a business.
Cash Flow
The movement of money in and out of a business.
Companies House
The UK government registrar where all limited companies must be incorporated and file official documents.
Company Secretary
An officer responsible for ensuring that a company complies with statutory obligations.
Confirmation Statement
An annual filing to Companies House confirming a company’s details, including directors and shareholders.
Contract
A legally binding agreement between two or more parties.
Corporation Tax
A tax paid by UK limited companies on their annual profits.
Credit Control
Managing customer debts to ensure timely payment.
CT600
The form companies must submit to HMRC to file their Corporation Tax return.
D
Data Protection Act (DPA)
UK legislation governing how businesses must collect, store, and use personal data.
Debtors
Customers or organisations that owe money to a business.
Director’s Responsibilities
The legal duties company directors must follow, such as acting in good faith and keeping accurate records.
Dividend
A share of profits paid to company shareholders.
Dividend Tax
Tax paid by shareholders on dividends received from company profits.
E
Equity
Ownership interest in a company, represented by shares.
Expenses
Costs incurred in the normal course of business operations.
F
Fixed Assets
Long-term tangible assets such as buildings, machinery, or vehicles.
Furlough
A temporary leave of absence from work, historically used during the COVID-19 pandemic, where employees were paid a portion of their wages by the government.
G
GDPR (UK GDPR)
The UK’s data protection rules requiring businesses to handle personal information securely and transparently.
Gross Profit
Revenue minus the cost of goods sold.
H
HMRC (His Majesty’s Revenue and Customs)
The UK government department responsible for tax collection and compliance.
I
Insolvency
A situation where a business cannot pay its debts when due.
Intellectual Property (IP)
Creations of the mind such as inventions, designs, and trademarks protected by law.
IR35 (Off-payroll working)
UK tax legislation designed to combat tax avoidance by contractors supplying their services via an intermediary, such as a personal service company.
L
Liabilities
Financial obligations or debts a company owes.
Limited Company (Ltd)
A type of business structure in the UK where liability is limited to the amount invested.
Liquidity
The ability of a business to meet short-term obligations.
M
Making Tax Digital (MTD)
An HMRC initiative requiring businesses to keep digital records and submit tax returns online.
Memorandum of Association
A statement signed by initial shareholders confirming their intention to form a limited company.
Merger
The combination of two companies into one.
N
National Insurance (NI)
Contributions made by employers and employees to fund state pensions and benefits.
Net Profit
The amount of profit left after all expenses, including tax, have been deducted.
O
Overheads
Ongoing business expenses not directly tied to producing goods or services.
P
P11D
A form employers use to report benefits in kind, such as company cars or health insurance, to HMRC.
Partnership
A business structure where two or more individuals share ownership and responsibility.
Partnership Agreement
A legal document setting out how a business partnership is managed, including profit sharing and responsibilities.
PAYE (Pay As You Earn)
HMRC’s system for collecting income tax and National Insurance from employee salaries.
R
R&D Tax Credits
A government scheme providing tax relief to companies carrying out research and development projects.
Registered Office
The official address of a UK company, recorded at Companies House, where legal documents are sent.
S
Seed Funding
The initial capital used to start a business, often from the founders' personal assets, friends, or family to cover initial operating expenses.
SEIS (Seed Enterprise Investment Scheme)
A scheme offering tax relief to investors who fund small, early-stage UK businesses.
Self-Assessment Tax Return
An annual tax return completed by self-employed people and company directors to report income and expenses.
Shareholder
An individual or entity that owns shares in a company.
SIC Code
Standard Industrial Classification code used by Companies House to identify a company’s business activities.
Sole Trader
A simple business structure where one person owns and runs the business, personally liable for debts.
Statutory Maternity Pay (SMP)
Pay employers must provide to eligible employees during maternity leave.
Statutory Sick Pay (SSP)
The minimum weekly payment employers must provide eligible employees off work due to illness.
T
Trading Address
The location where a business carries out its day-to-day operations, which may differ from its registered office.
V
VAT Threshold
The turnover level (£90,000 as of 2025) at which a business must register for Value Added Tax.
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