Variable interest rate

Based on an underlying interest rate index, such as the Bank of England base rate.


Average deviation of figures from their mean. In accounting this term is used in reference to the difference between a projected number and its actual number.

VAT – value added tax

An indirect tax levied on most business-business and business-consumer transactions in the UK and a number of other countries. There are three types of VAT: standard, reduced and zero. Business registered for VAT must charge VAT on their supplies and can reclaim any VAT on purchases.

VCT – venture capital trust

VCTs are companies listed on the London Stock Exchange and are vehicles set up as part of a scheme designed to encourage individuals to invest indirectly in a range of small higher-risk trading companies whose shares and securities are not listed on a recognised stock exchange. Individuals investing in VCTs may be entitled to various income tax and capital gains tax reliefs. VCTs are exempt from corporation tax on any gains arising on the disposal of their investments.

Venture capital

Capital which has been invested in small companies in their infancy, generally considered to be higher risk investments than a publicly listed company. Venture capitalists will usually receive an equity share in the company in return.