outsourced accounting, payroll, bookkeeping, bacs bureau, london

Epsilon Business Services Ltd
220 The Linen Hall	Tel	+44 (0)20 7734 0081
162 Regent Street	Fax	+44 (0)20 7734 3740
LONDON W1B 5TB	Email	sales@epsilonbs.com

This page gives the explanation of various terms used in the UK. We hope this will be helpful to clients from overseas or those unfamiliar with UK practice.

BACS
NI or NIC
P11D
P14
P45
P46
P60
PAYE
Tax Year
VAT

BACS
BACS is the UK banks' automated clearing system which processes debit and credit transactions on a three day cycle:

Business day 1:	File submitted electronically to BACS
Business day 2:	Transactions processed by BACS
Business day 3:	Debits and credits cleared by the start of business

NI or NIC (National Insurance Contributions)
National Insurance is the UK social security system. Contributions are withheld by the employer each month and are paid to HM Revenue and Customs by 19th of the following month. Electronic payments may be made by 22nd of the following month.

There is also an employer's contribution. See the NI data page for details of current rates and thresholds.

P11D
P11D forms are annual statements of expenses and benefits provided to certain employees which are filed with HM Revenue and Customs after the end of each tax year.

P14
P14 forms are annual statements of earnings and deductions for each employee which are filed with HM Revenue and Customs after the end of each tax year.

P45
P45 is a statement of earnings and tax issued by an employer when an employee leaves the company. The P45 form is given to the new employer in order to track the individual's employment, earnings and tax for the current tax year.

P46
If no P45 form is available, a P46 form is completed by the employee and the new employer to notify HM Revenue and Customs of the new employment.

P60
P60 is the employee's copy of the P14. P60s are not given to employees who left before the end of the tax year.

PAYE (Pay As You Earn)
PAYE, or 'Pay As You Earn', is the UK system of collecting personal tax. Tax is withheld by the employer each month and is paid to HM Revenue and Customs by 19th of the following month. Electronic payments may be made by 22nd of the following month.

See the PAYE data page for current rates and thresholds.

Tax Year
The UK tax year runs from 6 April to 5 April. So, for a monthly payroll, April will be Month 1 and March is Month 12. Cumulative figures on payroll reports always relate to the tax year rather than the calendar year. A company's financial year end does not have to coincide with the tax year end.

VAT (Value Added Tax)
Value Added Tax is the UK sales tax. The current standard rate is 15.0% (Effective 1st December 2008).

If you are looking for more specific information not covered in our Data Pages, try one of the websites listed on our Links page.

Registered Office as above. Registered in England No 2923652