Glossary

Companies House

Companies House [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] is the UK Government department that looks after all limited company information in the UK.

employers' liability insurance

Employers' liability insurance protects you against the cost of compensation claims arising from employee illness or injury, sustained as a result of their work for you. It is a legal requirement if your business employs one or more people, each day without the cover bringing fines of up to £2500. For further information explore the Simply Business website.

HMRC

Her Majesty’s Revenue and Customs.

professional indemnity insurance

If your business gives advice, offers a professional service, or handles data or intellectual property belonging to a client or business, you may need professional indemnity insurance. This cover protects you against the cost of a claim for negligence or a mistake that leaves the client out of pocket. For further information explore the Simply Business website.

public liability insurance

Public liability insurance protects you if clients or members of the public suffer personal injury or property damage because of your business. It covers the costs of subsequent legal expenses or compensation claims and is an integral cover for businesses that interact regularly with customers. For further information explore the Simply Business website.

self-employed

According to the UK Government, you are probably self-employed if you run your business for yourself and take responsibility for its success or failure; have several customers at the same time; can decide how, where and when you do your work; can hire other people at your own expense to help you or to do the work for you; provide the main items of equipment to do your work; are responsible for finishing any unsatisfactory work in your own time; charge an agreed fixed price for your work; and sell goods or services to make a profit.

shareholders

Shareholders are individuals or organisations who own a portion of a business. Limited companies must have at least one shareholder.

SMART objectives

For more details on setting SMART objectives explore the Open Learn Works page.

stakeholders

Stakeholders are individuals or organisations who have a ‘stake’ or interest in the business. This may or may not be a financial interest. For example, a family living next door to a factory would have an interest in what happens in the factory in terms of noise and disruption. They have no financial interest but are still stakeholders. It is common to confuse the term ‘stakeholder’ with the financial term ‘shareholder’.

turnover

Turnover is the amount of money taken by a business in a specified period, usually annually. It is simply a term that means the total amount of money entering the business from sales. It includes money spent on raw materials, hire equipment and subcontracting. For example, a kitchen fitter who fits a new kitchen for a client has two choices: either the client buys the kitchen for £5000 and the fitter charges £1000 to fit it (so the turnover for the fitter would be £1000); or the fitter buys the kitchen for £5000 and fits it for £1000 (so the turnover would be £6000). Even though the amount of money earned is the same, the turnover depends on who pays for the kitchen.

VAT

Value added tax. Currently a 20% tax applied to goods and services from VAT registered businesses.