Adverse Credit – Repossession orders, CCJ’s, IVA’s or arrears as a result of a bad credit record.
AEA- The yearly allowance for the Capital Gains Tax is known as the Annual Exempt Amount.
AER - The Annual Equivalent Rate is an interest figure paid on savings and investments at a rate of once a year.
Allowances - Allowances are a way of reducing your taxable income by using concessions from the Inland Revenue. The tax free amount of income is your Personal allowance.
Annuity - A regular income provided by an insurance policy in return for a pension fund or lump sum offered to a life company.
Audit - This occurs when an external qualified accountant officially examines the company’s accounts.
Banker’s Draft – A cheque made out by the debtor’s bank rather than a personal cheque to the creditor is a safer method as the cheque is less likely to “bounce”.
Bank of England – The Bank of England regulates the bank industry and its Monetary Policy Committee sets the interest rates to achieve the Treasury’s inflation target.
Bankruptcy - An individual who has been declared bankrupt has been served an order by court as a result of not being able to pay off their debts. The petition can be filed by the creditor or an individual.
Base Rate – A rate set by the Bank of England Monetary Committee, which is the lowest at which a lender will charge interest.
Bridging Loan – A Bridging Loan can be used by a purchaser of a property who has not yet sold their original property. It acts as a short term loan cover which ultimately becomes covered by long term finance.
Cancellation Period – The Consumer Credit Act states that customers have a period of time, after signing a contract, giving them the right to cancel their purchase of a financial product.
Cash Flow – This is the volume of cash that flows in and out of the company. “Cash positive” being where the company has more money coming in and “cash negative” is where more money is going out.
CCJs - Failure to pay an outstanding debt may result in a County Court Judgement. Once filed, your credit rating will be affected and if necessary Bailiffs will be used to enforce payments.
CGT - Capital Gains Tax is liable when you sell shares and its amount is dependent on the level of your income liable to income tax.
Child Tax Credit – This is available to families who have children and have a gross income of under £75,000 a year.
Cooling Off Period – This is the ability to cancel an insurance/assurance policy by a new policyholder within 14 days.
Corporation Tax - Corporation tax is the amount of tax a company has to pay on its profits.
CPI - The Consumer Price Index is used as a base for the UK inflation target by the Chancellor of the Exchequer. Differing to the Retail Price Index as it excludes house costs.
Credit Rating – A credit rating is a report, by credit reference agencies, made available to banks and other financial institutions. The credit reference agency takes information from public records such as court judgements and bankruptcies or information from financial institutions. If declined credit you have the right to find out why and view information in your credit report by obtaining the name and address of the credit agency used.
Credit Reference Agency – These are agencies that compile credit reports on consumers that are made available to companies offering credit.