Glossary
Glossary for accountancy practices: 14 terms in plain English
Each definition is taken from one of our guides, which gives the rule in full and where it comes from. The terms are in alphabetical order.
Agent services account
The HMRC account a practice uses to act for clients in Making Tax Digital. Adding Self Assessment authorisations to it does not sign any client up; sign-up is a separate step. An authorisation link sent to a client expires after 21 days.
Source: GOV.UK agent guidance for Making Tax Digital for Income Tax, read 1 October 2026
AML supervision
Every accountancy or bookkeeping practice must be supervised for anti-money-laundering purposes. A practice supervised by one of the 14 listed professional bodies, ICAEW and ACCA among them, does not register with HMRC. One that is not must register with HMRC, which costs a sole practitioner with one office £740 in the first year.
Source: GOV.UK, Fees you'll pay for money laundering supervision (updated 22 December 2025)
Authorised corporate service provider (ACSP)
An accountant or solicitor, registered with a UK anti-money-laundering supervisory body, that has also registered with Companies House as an authorised agent. Only a practice registered this way can verify its clients' identities for Companies House.
Source: Companies House identity verification guidance, read 1 October 2026
Companies House identity verification
A legal requirement since 18 November 2025 under the Economic Crime and Corporate Transparency Act. Each director and person with significant control verifies once, free through GOV.UK One Login or through an authorised agent, and gets a personal code that is then used on filings.
Source: Companies House identity verification guidance, read 1 October 2026
Companies House personal code
The code a person receives once their identity is verified. The next confirmation statement for each company must carry every director's code, and a person with significant control is given a 14-day period in which to provide theirs.
Source: Companies House identity verification guidance, read 1 October 2026
Customer due diligence
Identifying a client and checking that identity. It is required when a business relationship starts, for occasional transactions of 15,000 euros or more, when money laundering is suspected and when there is doubt about information already held. Records are kept for five years from the end of the relationship.
Source: HMRC anti-money-laundering guidance for accountancy service providers; Money Laundering Regulations 2017
Late filing penalty (company accounts)
The automatic penalty when a private company's accounts reach Companies House late: £150 up to one month late, £375 up to three months, £750 up to six months and £1,500 after that. Each figure doubles if the previous year's accounts were late too.
Free tool: Companies House late filing penalty calculator, and the confirmation statement date
Source: Companies House, Late filing penalties (updated 16 January 2026)
Late filing penalty (Self Assessment)
A tax return filed late costs £100 at once, with daily penalties and 6-month charges added as time passes, and separate penalties for paying late. A return filed on 20 April with £4,800 of tax paid the same day costs £340 in penalties; filed and paid on 20 August it costs £1,780.
Free tool: Self Assessment late filing and late payment penalty calculator (2026 rates)
Source: GOV.UK, Self Assessment tax returns: penalties
Making Tax Digital for Income Tax
HMRC's scheme under which sole traders and landlords keep digital records and send an update every quarter, then a final declaration. A client with qualifying income over £50,000 in 2024 to 2025 has been in since 6 April 2026; over £30,000 in 2025 to 2026 brings a client in from 6 April 2027, and over £20,000 in 2026 to 2027 from 6 April 2028.
Free tool: MTD for Income Tax deadline checker: when each client starts, and the four dates a year
Source: GOV.UK, Check if you're eligible for Making Tax Digital for Income Tax
Nominated officer
The person in a practice who receives reports of suspicion from staff and decides whether to make a suspicious activity report. The decision and its reasons are recorded either way. In a four-partner practice it is usually a partner.
Source: HMRC anti-money-laundering guidance for accountancy service providers
Professional clearance letter
The letter a new accountant sends the previous one asking whether there is anything they should know before accepting the client. It does not ask for permission. ICAEW says a reply period of less than two weeks is unlikely to be reasonable, and unpaid fees are not a reason to withhold a reply.
Source: ICAEW Code of Ethics (2026 edition), section 320; ICAEW helpsheet on changes in professional appointment
Qualifying income
The figure HMRC tests for Making Tax Digital for Income Tax: gross income from self-employment and property on the Self Assessment return, added together. It is not profit. A landlord with £28,000 of rent and a £24,000 side business is over £50,000 whatever either made after costs.
Free tool: MTD for Income Tax deadline checker: when each client starts, and the four dates a year
Source: GOV.UK, Check if you're eligible for Making Tax Digital for Income Tax
Quarterly update
The summary of income and expenses a client in Making Tax Digital for Income Tax sends HMRC four times a year, due by 7 August, 7 November, 7 February and 7 May. GOV.UK says there are no penalties for missing an update deadline in 2026 to 2027, but the tax return cannot be submitted without them.
Free tool: MTD for Income Tax deadline checker: when each client starts, and the four dates a year
Source: GOV.UK, Send quarterly updates; Penalties for Making Tax Digital for Income Tax (updated 30 March 2026)
Records date
A date a practice sets for clients to send their records, ahead of the filing deadline. With quarterly updates due on the 7th, a records date 18 days after each period ends (23 July, 23 October, 23 January, 23 April) leaves 15 days for the work.
Full guide: How to stop clients sending records late: a records policy for a small practice
Source: Our own schedule, built on GOV.UK's quarterly update deadlines
AEO Lookup editorial team
We write practical guides for people who run small UK firms, and we check every fact against its source on the date shown. Read how we review, or tell us if something has changed.