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...
The UK Government launched the Construction Industry Scheme (CIS for short) in 1971 in response to widespread tax evasion in the construction sector. So with CIS Statements, contractors now deduct tax from their subcontractor’s payments at the source and submit...
PAYE, or Pay As You Earn, is the system HMRC uses to collect Income Tax and National Insurance Contributions from employees. Employers deduct these taxes from wages before they reach employees, ensuring they pay taxes throughout the year rather than in 1 lump sum. Fun...
National Insurance, or NI for short, is a tax on earnings that funds various State Benefits. Employees, the self-employed and employers all contribute based on income levels. Unlike Income Tax, NI directly supports benefits that people may need throughout their lives,...
The Cycle to Work Scheme is a government-backed initiative that helps employees save money on bicycles and cycling gear. It aims to promote healthier and more sustainable commuting habits while reducing traffic congestion and air pollution. Since its introduction in...
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...
The Personal Allowance is the amount of income you can earn each tax year before paying Income Tax. For the 2024/25 tax year, the standard Personal Allowance is £12,570. This means you do not have to pay tax on income up to this threshold. However, your Personal...
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 additional income sources....
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 in the UK follows a progressive structure, meaning the more you earn, the higher the percentage of tax you pay on the additional income. This blog covers the tax bands, allowances and rates for the 2024/25 and 2025/26 tax years. Your Tax-Free Personal Allowance...
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...
What is a P11D? The P11D form is used by employers to report expenses and benefits provided to directors and employees that are not processed through payroll. Examples include company cars, health insurance, and other non-cash benefits. Each director or relevant...
What is the VAT Flat Rate Scheme? The VAT Flat Rate Scheme (FRS) simplifies the way small businesses manage their VAT payments. Instead of calculating the VAT on every transaction, businesses pay a fixed rate of VAT to HMRC – depending on the industry. Key...
Corporation Tax is a tax on company profits, payable to HMRC. Unlike Income Tax, businesses do not receive a bill for Corporation Tax. Instead, they must calculate, report and pay it themselves. It applies to: Limited companies Foreign companies with a UK branch or...
What is Double Entry Bookkeeping? Double Entry Bookkeeping is an accounting technique that records each financial transaction twice – once as a debit in one account and once as a credit in another. This method bases itself on the accounting equation: Assets =...
Student Loans are a form of support provided by the UK Government to help students cover the cost of attending university or college. They make higher education accessible to everyone, regardless of background. Student loans fall into two types: Tuition Fee Loans...
Marriage Allowance Transfer Marriage Allowance transfer allows one spouse to transfer a portion of their Personal Tax Allowance to the other, providing a tax reduction if certain conditions are met. Who is Eligible? You may qualify for Marriage Allowance if:...
What is Marriage Allowance? Marriage Allowance is a government initiative aimed at reducing the tax burden for married couples or civil partners. This scheme allows one partner to transfer a portion of their unused personal tax allowance to their spouse or civil...
Trivial benefits are small gifts or perks provided to an employee that costs £50 or less. To qualify as a trivial benefit, the gift must meet the following criteria: It costs £50 or less to provide, including VAT. It isn’t cash or a cash voucher. It isn’t...
Tax on Tips and Gratuities All tips and gratuities, whether received in cash directly from the customer or added electronically via card or cheque, are subject to Income Tax. Depending on how these tips are managed and distributed, National Insurance Contributions...
Child Benefit is valuable support for families raising children in the UK. But if HMRC considers your income high, they may apply a tax charge called the High Income Child Benefit Charge. What is the High Income Child Benefit Charge? High Income Child Benefit Charge...
Dividends are payments that limited companies distribute to their shareholders from their profits. If a company makes a profit after covering all expenses and taxes, it can choose to share some of that profit with its shareholders. These payments provide shareholders...
