Glossary

National Insurance

Contributions paid by employees, self-employed individuals and employers based on income earned for the provision of the benefits such as the state pension. The contributions are administered by HM Revenue & Customs.

National tax

Tax treated as having been paid and not repayable. Applicable to, for example, life insurance policy gains and foreign income dividends.

Near money

Assets which are readily convertible into cash without running the risk of causing significant losses in value.

Negative goodwill

Arises when the fair value of the net assets of a business exceed the price paid on acquisition.

Negotiable instrument

Can be a cheque or security that represents money that is payable and which can be transferred from one entity to another.

Net current assets

Calculated by subtracting current liabilities from current assets.

Net present value

The total series of expected cash flows discounted over the time period in which they are incurred/earned less the initial dividend. NPV calculations are primarily used to appraise long-term projects by accounting for the time value of money.

Net profit margin

Calculated as net profit as a percentage of sales, indicating a company’s ability to control its costs and overheads and generate an underlying return.

Net realisable value

Generally equal to the selling price of goods or assets less the selling costs incurred.

Net yield

The return on an investment after deducting tax, commission and other expenses.

Neutrality

The absence of bias when handling financial information.

Nominal account

A ledger account used to itemise/analyse revenue, expenditure, assets and liabilities.

Nominal ledger

See ‘ledger’.

Non contributory pension plan

An employer funded employee pension scheme to which employees do not make contributions.

Non discretionary

Means the action/payment is mandatory and is not up to the individual or company to change.

Notice of coding

The notification of your PAYE code that you receive from the Inland Revenue.