by Pi Accountancy | Sep 26, 2024 | Frequently Asked Questions
What is Cash Accounting? Cash accounting, also called cash-basis, is a method of recording income and expenses based on when money actually enters or leaves your business account. This means you record a payment only when you receive it, and an expense only when you...
by Pi Accountancy | Sep 25, 2024 | Frequently Asked Questions
What is Accrual Accounting? Accrual accounting is a method of recording financial transactions when they happen, rather than when money changes hands. This approach helps businesses gain a more accurate picture of their financial health by tracking income and expenses...
by Pi Accountancy | Sep 19, 2024 | Frequently Asked Questions
What is Income Tax? HMRC levies Income Tax on various forms of income earned by individuals, businesses, and other entities, though not all income qualifies as taxable. Taxpayers pay Income Tax directly to HMRC, instead of through indirect collection methods. HMRC...
by Pi Accountancy | Sep 18, 2024 | Frequently Asked Questions
What is Inheritance Tax? Inheritance Tax (IHT) is a tax on the estate of a deceased person. This includes all property, possessions, and money – based on its value at the time of death. At this time, the government charges Inheritance Tax at 40% on the portion...
by Pi Accountancy | Sep 17, 2024 | Frequently Asked Questions
What is Capital Gains Tax? Capital Gains Tax (CGT) is a tax on the profit you make when you sell or dispose of an asset that has increased in value, including assets like stocks, property, and artwork. Additionally, the tax applies to the gain you make, not the total...
by Pi Accountancy | Sep 13, 2024 | Pension
State Pension Triple Lock Introduced in 2010, the Triple Lock is a government guarantee to increase the State Pension every year by whichever of three measures is the highest: 2.5% Inflation (measured by the Consumer Prices Index in September of the previous year)...
by Pi Accountancy | Sep 12, 2024 | Pension
What is Pension Credit? Pension Credit is an income-related benefit that offers extra money to help with your living costs. It’s available to those over State Pension age and is especially beneficial if you’re on a low income. Importantly, you can receive Pension...
by Pi Accountancy | Sep 11, 2024 | Pension
State Pension Increase Explained Good news first – the government have proposed raising the State Pension in April 2026. For those who receive the New Full State Pension (introduced after April 2016), the payment will increase from £221.20 to £230.05 per week. This...
by Pi Accountancy | Sep 5, 2024 | Frequently Asked Questions
What are HMRC Penalties? HMRC imposes penalties on taxpayers who fail to comply with their tax obligations. Consequently, these penalties serve as a deterrent to non-compliance and encourage everyone to adhere to tax laws. If you don’t file your tax return on...
by Pi Accountancy | Sep 4, 2024 | Frequently Asked Questions
What is Tax Investigation Insurance? Tax Investigation Insurance is a specialised insurance policy that helps individuals and businesses cover the costs associated with a tax investigation conducted by HMRC. Specifically, HMRC conducts these investigations as routine...
by Pi Accountancy | Sep 3, 2024 | Frequently Asked Questions
What is a Tax Investigation? A tax investigation is not an accusation of wrongdoing but a process to verify that a business or individual complies with HMRC’s tax laws and has paid the correct tax amount. What Triggers a Tax Investigation? Tax investigations can...
by Pi Accountancy | Aug 28, 2024 | Frequently Asked Questions
What is a Cash Flow Statement? A Cash Flow Statement outlines the inflows and outflows of cash and cash equivalents in your business. It provides insights into your company’s liquidity by covering debts and operating expenses without additional financing. Unlike...
by Pi Accountancy | Aug 28, 2024 | Frequently Asked Questions
What is an Income Statement? An Income Statement, also known as a Profit and Loss Statement (P&L), summarises a company’s income and expenses over a specific period. It provides a snapshot of a business’s financial performance and is essential for...
by Pi Accountancy | Aug 27, 2024 | Frequently Asked Questions
What is a Balance Sheet? The Balance Sheet provides a snapshot of a company’s assets, liabilities and equity at a given point in time. This enables stakeholders to assess the financial health and operational results of the business. Moreover, a Balance Sheet is...
by Pi Accountancy | Aug 22, 2024 | Frequently Asked Questions
What is a P45? A P45 document records details about your income and the tax you’ve paid while working for a particular employer. The form ensures that your tax records are accurate and up-to-date, both for you and for HMRC. You will receive a P45 when you leave...
by Pi Accountancy | Aug 21, 2024 | Frequently Asked Questions
What is a P60? Your employer issues a P60 at the end of each tax year, summarising your income and tax deductions from April 6th to April 5th of the following year. This form provides a clear record of what you earned and the taxes you paid over the year. What...
by Pi Accountancy | Aug 20, 2024 | Frequently Asked Questions
What is a P30? Employers use a P30 form to report their National Insurance Contributions (NICs) to HMRC. In the UK, employers are responsible for deducting NICs from their employees’ wages or salaries. These deductions help fund essential social services like...
by Pi Accountancy | Aug 15, 2024 | Frequently Asked Questions
What is an Accounting Journal? An accounting journal is a record where businesses document their financial transactions in chronological order. This process is the first step in the accounting cycle and is crucial for accurate financial reporting. Accountants and...
by Pi Accountancy | Aug 14, 2024 | Frequently Asked Questions
What is an Accounting Ledger? An accounting ledger records all financial transactions organised by account. This ledger records every financial move made by the business, providing a comprehensive view of its financial health. Think of it as the backbone of a...
by Pi Accountancy | Aug 13, 2024 | Frequently Asked Questions
What is an Accounting Period? An accounting period is a specific timeframe for which a business prepares its financial statements and reports. The purpose of an accounting period is to provide a consistent basis for measuring and reporting financial performance. This...
by Pi Accountancy | Aug 7, 2024 | The Budget
The Bank of England Cuts the Base Rate to 5% On the 1st August 2024, the Bank of England cut the base rate from 5.25% to 5% – marking the first base rate cut in over four years! The Bank of England (BoE) uses the base rate to control inflation, which also...
by Pi Accountancy | Aug 6, 2024 | Frequently Asked Questions
What is a Business Bank Account? A business bank account specifically manages the finances of a business. Unlike personal bank accounts, business bank accounts offer features tailored to business needs, helping you to manage income, expenses, and financial...
by Pi Accountancy | Aug 1, 2024 | CIS
CIS Statements Adhering to the Construction Industry Scheme (CIS) requirements is crucial for both contractors and subcontractors. One of the essential components of CIS compliance is the proper handling of CIS statements. Contractors issue CIS statements to...
by Pi Accountancy | Jul 31, 2024 | Frequently Asked Questions
What is PAYE? PAYE or “Pay As You Earn” is a method that deducts Income Tax from your wages before you receive them. This means that your employer sends the tax directly to HMRC from your pay. This system covers National Insurance and any applicable...
