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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
What is National Insurance? National Insurance (NI) is a component of the UK’s welfare system, designed to fund various State Benefits, like the State Pension. Employees and employers make National Insurance Contributions (NICs) to qualify for the aforementioned...
The Cycle to Work Scheme The Cycle to Work scheme helps employees purchase bicycles and equipment through a tax-efficient loan. Employers buy the bikes and lease them to employees through a salary sacrifice arrangement. This means employees pay for the bike in monthly...
What is the Lower Earnings Limit? The Lower Earnings Limit (LEL) is the minimum amount an employee must earn to qualify for certain state benefits and to start earning entitlement towards the State Pension. It is not the amount at which employees begin paying National...
What is Maternity Allowance? Maternity Allowance supports pregnant women and new mothers who do not qualify for Statutory Maternity Pay. Often, self-employed women, those recently employed, or those who haven’t worked with their current employer long enough, do...
What is Personal Allowance? Personal Allowance refers to the amount of income each individual in the UK can earn tax-free each year. HMRC has set this amount at £12,570 for the 2023/24 tax year. As a result, if your annual income is below this threshold, you...
Countdown to January 31, 2026: HMRC uses the Self Assessment system to collect Income Tax and requires taxpayers to complete a yearly tax return. Self Assessment is for those who do not have their taxes automatically deducted from their earnings or for those with...
Does Tax Apply to Marketable Securities? Yes, tax does apply to Marketable Securities. Marketable securities quickly and easily convert into cash due to their high liquidity. Common stocks, treasury bills, and bonds, traded on public stock exchanges, are examples of...
What is Football Transfer Tax? Football Transfer Tax refers to the tax implications and regulations surrounding the transfer of football players between clubs. There is no specific tax but rather various tax considerations that come into play during the process of...
Tax Bands and Rates for 2024/25 This blog aims to break down the current tax bands and rates, personal allowances, and additional allowances that could affect your tax liabilities for the tax year running from 6 April 2024 to 5 April 2025. Your Tax-Free Personal...
Holiday Accrual on SSP When employees are unable to work due to sickness, they may be eligible for Statutory Sick Pay (SSP), currently set at £116.75 per week for up to 28 weeks in the UK. During these periods, employees still accrue Holiday or Annual Leave. Employees...
