Glossary

Ab initio (ab init)

From the beginning (Latin). If a term or condition of a contract was illegal or invalid when it was signed, then the contract was void 'ab initio'.

Abstraction

Taking water from controlled waters such as rivers, reservoirs or boreholes. Depending on the amount of water that you take, you may need to have an authorisation or a licence. You may require an abstraction licence if you intend to use more than 20 cubic metres per day in England, Northern Ireland or Wales, or more than 50 cubic metres per day in Scotland.

Access control

A way of controlling who has access to equipment, data, information, systems or applications. This can include physical controls, such as locks on doors, PIN entry systems, turnstiles and window bars, as well as logical controls such as user names, passwords and file permissions for access to computer systems and networks.

Accompanying administrative document  (AAD)

A control document required for movements of excise goods in duty suspension within the European Union (EU) and for export.

Account sales

A term used when goods imported on consignment are valued for customs purposes by reference to the price they achieve when sold in the European Union (EU). Account sales commonly apply to importations of perishable goods.

Accounting reference date

Date on which a company's financial year ends. This is normally 12 months after the previous accounting period ended or, for new companies, at the end of the twelfth month in which a company incorporated.

Accounting reference period  (ARP)

Period covered by a company's annual accounts, usually one year.

Accounting Standards Board  (ASB)

The Accounting Standards Board produces formal statements of accounting standards that apply to all companies.

Accounts payable

Money owed by a company or individual for the goods or services they have received.

Accounts receivable

Money owed to a company or individual for the goods or services they have provided.

Acquisition

Receipt, by a person registered or liable to be registered for VAT, of goods that have been supplied by a registered person in another European Union (EU) Member State and removed from there to the UK.

Ad valorem duty

Duty expressed as a percentage based on the customs value of the goods, eg 10 per cent ad valorem means that the duty payable is 10 per cent of the customs value of the goods.

Additional costs

The price you negotiate with overseas customers also needs to include some additional costs. For example, transportation costs may include the cost of special packaging and labelling, while the detailed documentation you generally need may involve extra costs.

Additional maternity leave  (AML)

The second 26-week period of maternity leave after ordinary maternity leave finishes.

Additional premium

A premium payable by the insured as a result of a change in policy cover or declaration adjustment to reflect increased exposure or sums insured.

Additional voluntary contribution  (AVC)

These are contributions you can pay in addition to any contribution you have to pay as a member of a company pension scheme. AVCs can provide extra pension benefits.

Adjuster

A person who investigates claims on behalf of insurers.

Administration

The appointment of a licensed insolvency practitioner over a defaulting company either by a court, by a holder of a floating charge over the company's assets, or by the company itself. Administration has the primary purpose of rescuing the company by trading it back into solvency.

Administrator

Insolvency practitioner holding office in administration.

Admission temporaire carnet  (ATA carnet)

A document accepted by countries party to the Admission Temporaire (ATA) (Temporary Admission) Convention which facilitates the temporary import and export of goods and replaces normal customs documentation. In the UK, carnets are issued by the London Chamber of Commerce and Industry, and by several other Chambers of Commerce in various towns and cities.

Admission temporaire roulette  (ATR)

Temporary admission on wheels - certificates used to indicate that goods are entitled to preferential rates of duty in Turkey.

Advance fixing certificate  (AFC)

A form of export licence for Common Agricultural Policy (CAP) goods. AFCs set the rate at which export refunds will be paid on exported products. Because AFCs must be applied for in advance of export, both the exporter and the Rural Payments Agency will know how much money will be paid in export refund over the life of the certificate.

Advising bank

Bank operating in an exporter's country that handles letters of credit (see Letter of credit) for a foreign bank by notifying the exporter that the credit has been opened in its favour. The advising bank lets the exporter know exactly what the conditions of the letter of credit are but isn't necessarily responsible for payment.

African Caribbean and Pacific States  (ACP)

A collective term for a large number of independent states which are treated similarly for the purposes of trade preferences. A complete list of the states included in the ACP group can be found in Volume 1 of the Tariff.

Agent

For the purpose of the HM Revenue & Customs (HMRC) agent service, an agent is a third party that is authorised to transact online on behalf of a VAT-registered client. Examples include accountants and book-keepers appointed by individual clients.

Agent

In contract law, a person or organisation appointed to act on behalf of another person or organisation, known as the principal. The level of the agent's authority to deal is subject to agreement between the principal and the agent. However, unless told otherwise, third parties can assume that the agent has full powers to deal.

Agent ID

An agent ID is given to an agent when they enrol in an HM Revenue & Customs (HMRC) online service for the first time. The agent supplies the details for half of the ID, the second part is generated by the government gateway. It is the agent ID that clients use to appoint agents to transact on their behalf.

Aggregate limit of indemnity

The maximum amount an insurer will pay under a policy in respect of all accumulated claims arising within a specified period of insurance.

Aggregates levy

This is a tax on the commercial exploitation in the UK of rock, sand and gravel.

Agricultural component  (AC)

A Customs (import) charge applicable to CAP goods processed from certain basic agricultural products.

Air waybill  (AWB)

A waybill that covers both domestic and international flights transporting goods to a specified destination. This is a non-negotiable instrument of air transport that serves as a receipt for the shipper, indicating that the carrier has accepted the goods listed and is obliged to carry the consignment to the airport of destination according to specified conditions.

Airport of receipt  (AOR)

The cargo community system (CCSUK) airport at which a transit shed operator creates a consignment record for uncleared imported goods.

Alcohol ingredients relief  (AIR)

Various alcoholic beverages are to be relieved from excise duty when used, within certain limits, as ingredients for specified classes of food or homeopathic/ herbal remedies.

Allotment of shares

The process of allocating shares between shareholders usually pro rata or according to some prior agreement. The allotment may have conditions, which must be satisfied before the shares are issued, eg payment for them. This precedes the actual issue of shares.

Alternative investment market  (AIM)

The junior stock market for younger, growth-oriented companies. New businesses, which have never traded, can join the alternative investment market. Although considered to be a higher risk for investors, it has potentially higher rewards than the main stock market.

Alternative means of gaining assurance  (AMOGA)

Based on checks of records obtained from the trader, or HM Revenue & Customs visits targeted at a particular area of the trader's activities.

Always-on

Always-on technologies such as broadband can receive data constantly, rather than having to use a modem to dial up each time access is required. This kind of access is paid for on a rental or leased-line basis, rather than according to the amount of time spent using the connection.

Amortisation

The writing off of the cost of goodwill or other intangible assets over a period of time.

Animal health imports controls

Many types of live animal and animal products are subject to health controls on import to the European Union (EU). Animals susceptible to rabies are subject to health controls on entry to the UK, even if they arrive from other EU member states (except the Irish Republic). In the UK, all animal health controls are enforced by the Department of the Environment, Food and Rural Affairs (DEFRA).

Annual accounts

The accounts consist of a directors' report signed by a director or the company secretary, a profit and loss account, a balance sheet signed by a director, the auditor's report signed by the auditor or accountant's report signed by the accountant and notes to the accountants. The accounts must be laid before a general meeting of all members of the company. They must be approved by the meeting. For accounting reference periods that begin on or after 6 April 2008 these accounts must be submitted to Companies House with the auditor's report, or an accountant's report for small companies with turnover of less than £6.5 million and a balance sheet of less than £3.26 million, and for medium-sized companies with a turnover of £25.9 million and a balance sheet of £12.9 million.

Annual General Meeting  (AGM)

Annual meeting of company shareholders where the financial statements for the previous financial year are presented. AGMs can also be used to appoint directors and auditors and allow shareholders to ask board members questions.

Annual percentage rate  (APR)

The annual percentage rate gives a more accurate idea of how much you are being charged when you borrow money. It allows you to compare the total cost of borrowing money for different types of loan, and lengths of time.

Annuity

An income-producing investment bought from an insurance company, which pays a guaranteed annual income throughout your lifetime. Annuities are usually bought with the proceeds of a pension fund.

Anti-dumping

If a company exports a product at a price lower than the price it normally charges in its home market, it's said to be dumping the product. Member countries of the World Trade Organisation may be able to impose certain measures on other members that dump products on their markets.

Anti-dumping duty  (ADD)

A customs duty on imports, providing protection against the dumping of cheap goods in the European Union (EU) by foreign producers.

Anti-virus software

Software that scans internal/external drives, emails and attachments for malicious viruses and worms, and removes them or prevents them entering your computer system. Because of the rate at which new viruses emerge you should select software that is capable of being updated on a regular basis, usually by means of a download from the manufacturer's website.

Applet

A small application, written in the programming language Java, that is intended for use within a web browser and cannot be run as a stand-alone application. Typically an applet extends the capabilities of the browser by providing interactive animations or other simple tasks.

Application service provider  (ASP)

An application service provider builds, hosts, runs and sells access to applications over the internet. This allows individuals and companies to outsource various functions by leasing or renting applications and software.

Approved Code of Practice  (ACoP)

ACoPs provide detailed guidance on how to comply with the relevant health and safety legislation. You are strongly advised to follow the steps set out in the ACoP. Should you be taken to court, the onus will be on you to demonstrate that any alternative arrangements are as effective in protecting health and safety as the methods set out in the ACoP.

Approved Supply List

The Approved Supply List contains many commonly used hazardous substances. Suppliers must identify these substances with a warning label and provide you with a safety data sheet.

Articles of Association

Set out the main rules for the way a company is to be run. Statutory Tables A to G set out what the articles should cover. Table A acts as the default for all companies limited by shares.

Asian dollars

US dollars deposited in Asia and the Pacific Basin.

Asset cover

The ratio of net assets to total debt. Used by banks to judge the security of lending.

Assets

The things that you own, such as buildings, vehicles, shares and money in the bank. The opposite of your assets are your liabilities.

Association for Payment Clearing Services  (APACS)

The Association for Payment Clearing Services has been replaced by a service company - UK Payments Administration Ltd.

Assurance

A term interchangeable with insurance but generally used in connection with life cover as assurance implies the certainty of an event and insurance the probability.

Asymmetric digital subscriber line  (ADSL)

An always-on technology for transmitting digital information at high bandwidths using existing phone lines. It is asymmetric because it can receive information faster than it sends it on the basis that most users download more information than they upload.

Audit report

The result of the review of the annual accounts by the auditors. It must accompany the accounts when filed at Companies House. An unqualified report means that the auditors found nothing wrong with the accounts. If the auditors are concerned that the accounts are not a true reflection of the state of the company the report will be qualified by their comments on what they have found.

Auditors

Accountants appointed to review and report upon the annual accounts of a company. Only accountants qualified as members of one of the professional bodies recognised by legislation can act as auditors.

Authorised Economic Operator  (AEO)

The AEO certificate is an internationally recognised quality mark which tells people that your role in the international supply chain is secure, and that your customs controls and procedures are efficient and compliant. Your business must be established in the European Community.

Authorised operator

A trader authorised by HM Revenue & Customs (HMRC) to operate one or more simplified export procedures: simplified declaration procedure (SDP) and local clearance procedure (LCP) and/or a designated export place (DEP). It also includes an exporter or third party allowed to make full export declarations to the Customs Handling of Import and Export Freight (CHIEF) system.

Authorised Waste Carrier

Authorised Waste Carriers are permitted to handle and dispose of waste. They include council waste collectors, waste carriers and brokers registered with the Environment Agency or the Scottish Environment Protection Agency, and holders of environmental permits and waste management licences.