Glossary and definitions

Why wait to speak to us to develop your understanding?

The world of accounting has more than its fair share of technical jargon. As such, we have listed some of the key words and their definitions below. If there is something you don’t understand or you would like a professional definition, please email us at and we will be happy to provide you with an explanation. We’ll add it to our glossary page too for good measure.


The process of communicating financial information about a business entity.


A generic term for people who operate in the field of accountancy. Generally those who have gained professional qualifications and accreditation use their full title such as Chartered Accountant, Chartered Management Accountant or Chartered Certified Accountant. At present in the UK anybody can call themselves an accountant irrespective of their experience or qualifications. Many are unregulated (unlike members with professional qualifications who are normally subject to external monitoring of ongoing professional competence).

Acquisitions and Disposals (of businesses)

Many successful businesses have bought and sold businesses to help them achieve personal wealth. CPP can help in deciding upon a strategy to maximise the opportunity of either growing your business by acquiring/adding another business to yours or by adopting a strategy which will make your business attractive to a buyer.


An audit is an accounting procedure under which financial records are reviewed. UK company law requires larger companies to have an independent audit annually on their financial results but many smaller and medium-sized businesses are exempt from this requirement. Lenders, however, make the requirement of an independent audit as part of their terms and conditions of lending.

Bookkeeping Services

Every business is required to record every business transaction. Bookkeeping is the method in which transactions are recorded to provide a record and trail of the constituent parts of a business’s incomings and outgoings. Bookkeeping tends to be labour intensive and repetitive, but accurate recording is essential for any business (garbage in garbage out!).

Capital Gains Tax (CGT)

A tax realised from the sale of a capital asset (investment). Current rates of CGT are lower than the highest rate of income tax.

Chartered Accountant

A person who has been through a rigorous training process and successfully passed professional examinations enabling the individual to give professional advice on a wide range of business and finance issues.

Company Secretarial Assistance

If you conduct your business through a limited company or a limited liability partnership you will need to ensure that you don’t fall foul of any of the rules. CPP can help you avoid the pitfalls.


Businesses are required to meet the requirements of a vast range of legislation laws such as company, employment, health & safety, taxation, trademark & intellectual property, corporate governance and environmental. Compliance means acting in accordance with the requirements of the relevant law or guidelines.

Institute of Chartered Accountants in England and Wales (ICAEW)

This is Europe’s largest premier accountancy body whose members are widely regarded as advisers and influencers vital to the success of business. Qualified Chartered Accountants are equipped with cutting edge strategic business skills including financial reporting, taxation and auditing.

Management Accounting or Managerial Accounting

This is a process to provide decision-makers with relevant financial information in a timely fashion, predominantly for a business’s internal use. Aspects covered include detailed analysis of costs to assist in pricing policy, analysis of sales by product or service (and related margins), proportion of sales generated by client/customer and/or sales rep, assistance in setting budgets and forecasts as well as regular business performance reports.


A system by which income tax and national insurance contributions levied on wage and salary earners is deducted by and paid by an employer directly to the Government. In effect a system whereby employers become unpaid tax collectors for the Government with penalties for failing to operate the system correctly.


The financial record of employees’ salaries, wages, bonuses, net (take home) pay and deductions (including taxation).

Production of Accounts

Legislation requires a limited liability companies (Ltd.) and limited liability partnership (LLP) to file at Companies House annual financial statements in a manner prescribed by the Companies Act. From 2011 HM Revenue & Customs will also require accounts and returns in a prescribed format. CPP assists many businesses in ensuring that annual financial statements/ accounts meet with the relevant requirements.

Profit Improvement Studies

A service whereby we would seek to “get under the skin” of a business to provide advice on areas which might provide scope for increasing the difference between a business’s income and expenses. This might involve discussing how services/goods are priced, who services/goods are bought from and how prices are negotiated with suppliers, maximising return from investment in machines/technology and/or how to evaluate the costs and revenue earned by employee as well as suggestions as to how costs might be reduced.

Taxation and Tax Advice

There are two certainties in life - death and taxes. Taxation takes the form of direct taxation (taxation on income, profits, inheritance, salaries etc.) and indirect taxation (for example value added tax, insurance premium tax, airport departure tax, stamp duty). Tax advice is a service to help you minimise how much you pay in taxes and assist you in complying with the legislation whilst organising your affairs in a manner in which you only pay as much tax as you have to.

Taxation Avoidance

Do you think it’s unethical to use experts to help you minimise how much you pay to the Exchequer? If so, CPP is not for you; but if you’re looking for help in organising your affairs in a manner which complies with taxation legislation, makes use of available exemptions and adopts a strategy designed to minimise the amount you pay in tax you need CPP to help you legally avoid tax.

Taxation Evasion

Unwilling to disclose transactions, willing to under-declare income or overstate expenses, have offshore funds/assets not reported to UK tax authorities when they should be? These are all examples of tax evasion and are potentially criminal offences. In short, tax evasion is illegal, tax avoidance is legal.

Tax Efficient Remuneration Strategy

It’s what you keep, not what you earn that’s important! CPP can help you maximise your own and your employees’ after-tax taken home pay by assisting you in structuring pay and reward packages in a manner which minimises the amounts swallowed up in taxes and maximises the amount left to spend and/or invest after taxation.

Value Added Tax (VAT)

VAT - an indirect form of taxation whereby a VAT registered business/trader is obliged to charge VAT to customers, collect the money on behalf of the Government and pay the sum collected to the Government (after deducting any VAT the business itself has incurred from suppliers of goods/services. VAT represents a significant chunk of the UK Government’s income. The rules are complex and penalties for getting it wrong are punitive.