UK company glossary
Clear, bilingual explainers for the key terms you need to understand as a UK company owner.
Companies House
Companies House is the UK government registrar of companies. It incorporates and dissolves companies, and holds the public register of company information (directors, accounts, confirmation statements).
Read the definition →Confirmation statement
An annual filing (form CS01) that confirms your company's key details at Companies House are correct — directors, registered office, shareholders, PSCs and SIC codes. It must be filed at least once every 12 months.
Read the definition →PSC (Person with Significant Control)
A Person with Significant Control is someone who effectively owns or controls a company — typically holding more than 25% of shares or voting rights, or the right to appoint/remove directors. Companies must identify and register their PSCs.
Read the definition →Corporation Tax
The tax a UK limited company pays on its profits, administered by HMRC. The company files a Company Tax Return (CT600) and pays the tax due for each accounting period.
Read the definition →Annual accounts (statutory accounts)
The statutory financial statements a UK company prepares each year — typically a balance sheet, profit and loss account and notes. They're filed with Companies House and used for the HMRC tax return.
Read the definition →Registered office
The official address of a UK company, held on the public register, where Companies House and HMRC send statutory mail. It must be a real address (an 'appropriate address') in the UK where mail can be acknowledged.
Read the definition →Director ID verification (IDV)
A new Companies House requirement for all directors and PSCs to prove their identity. Verification is done either through GOV.UK One Login or via an Authorised Corporate Service Provider (ACSP).
Read the definition →Strike off (dissolution)
Removing a company from the Companies House register. It can be voluntary (the directors apply to close the company) or compulsory (Companies House removes it for non-compliance, such as missing filings).
Read the definition →Tax residence
Where you are treated as resident for tax — which decides which country can tax your income. For individuals, UK tax residence is decided by the Statutory Residence Test (SRT). For companies, a UK-incorporated company is UK tax resident by default.
Read the definition →Statutory Residence Test (SRT)
The set of rules HMRC uses to decide whether an individual is UK tax resident in a tax year. It has three parts applied in order: the automatic overseas tests, the automatic UK tests, and the sufficient ties test.
Read the definition →Double taxation treaty (DTT)
An agreement between two countries that prevents the same income being fully taxed twice. The UK has treaties with most Arab states (including the UAE, Saudi Arabia, Qatar, Kuwait, Egypt and others), setting which country taxes what and providing relief or credits.
Read the definition →Self Assessment
HMRC's system for individuals to report income that isn't taxed at source and pay any tax due, via a tax return (SA100). Some non-resident directors and shareholders need to file one — for example for UK dividends, rental income, or because HMRC has asked them to.
Read the definition →Domicile
A general-law concept, separate from residence, broadly meaning the country you treat as your permanent home. It can affect how some of your worldwide income and gains are taxed in the UK. UK domicile rules have changed in recent years.
Read the definition →HMRC (His Majesty's Revenue and Customs)
HMRC is the UK's tax authority, responsible for collecting taxes, administering benefits and enforcing tax law. It handles Corporation Tax, VAT, PAYE, income tax and National Insurance — separately from Companies House.
Read the definition →UTR number (Unique Taxpayer Reference)
A 10-digit number HMRC assigns to every UK company and self-employed individual when they register for tax. Companies receive a Corporation Tax UTR; individuals receive a personal UTR for Self Assessment. The two are different numbers.
Read the definition →Company Registration Number (CRN)
A unique 8-digit number assigned to every UK company by Companies House at incorporation. It never changes, even if the company name changes, and appears on all official documents and the public register.
Read the definition →VAT (Value Added Tax)
A consumption tax charged on most goods and services in the UK, currently at a standard rate of 20%. UK businesses with taxable turnover above £90,000 must register. Non-resident businesses selling digital services to UK consumers must register from the first sale, with no threshold.
Read the definition →PAYE (Pay As You Earn)
HMRC's system for collecting Income Tax and National Insurance from employees and directors who receive a salary through their company. The company deducts tax at source each payroll run and pays it to HMRC, usually monthly.
Read the definition →National Insurance (NIC)
Contributions paid by employees, employers and the self-employed to fund UK state benefits including the NHS and state pension. Directors paying themselves a salary through PAYE pay employee NICs; the company pays employer NICs on top.
Read the definition →SIC code (Standard Industrial Classification)
A five-digit code that classifies a UK company's main business activity. Every company must have at least one SIC code, chosen at incorporation and updated via the confirmation statement if the business changes.
Read the definition →Dormant company
A UK company that has had no significant accounting transactions during its financial year. Companies House and HMRC use slightly different definitions — a company can be dormant for Companies House filing purposes but still owe HMRC obligations if it received any income or paid any expenses.
Read the definition →Director's loan account (DLA)
A record of money a director borrows from or lends to their company, beyond salary, dividends or reimbursed expenses. If the director owes the company money at the year end, the account is 'overdrawn'. If the company owes the director, it is 'in credit'.
Read the definition →Dividends
A distribution of company profits to shareholders, proportional to their shareholding. Dividends can only be paid from retained distributable profits — not from capital, loans or anticipated future profits. They are not a salary and require a board resolution and dividend voucher.
Read the definition →Share capital
The total value of shares a company has issued to its shareholders. Most UK limited companies incorporate with £1 in share capital (one £1 ordinary share). The amount does not limit what the company can earn, borrow or spend.
Read the definition →Accounting period
The span of time covered by a set of company accounts — usually 12 months. It runs to the company's accounting reference date (ARD), which is the company's year end. HMRC uses the accounting period to set Corporation Tax deadlines.
Read the definition →Making Tax Digital (MTD)
HMRC's programme requiring businesses to keep digital tax records and submit returns through approved software. MTD for VAT is already mandatory for all VAT-registered businesses. MTD for Income Tax Self Assessment (MTD ITSA) is being phased in from April 2026.
Read the definition →Bookkeeping
The systematic recording of a company's financial transactions — income, expenses, invoices, bank payments and receipts. Accurate bookkeeping is the foundation for annual accounts, VAT returns, Corporation Tax calculations and payroll.
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