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 | Advisory and Resources, CIS, Regulations and Schemes, Self-Employment and SMEs
Contractors under the Construction Industry Scheme (CIS), must deduct tax from payments made to subcontractors. CIS Statements are the actual documents which detail how much the contractor paid and deducted. Additionally, each statement covers one tax month and...
by Pi Accountancy | Jul 31, 2024 | Frequently Asked Questions
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...
by Pi Accountancy | Jul 30, 2024 | Frequently Asked Questions
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,...
by Pi Accountancy | Jul 25, 2024 | Business
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...
by Pi Accountancy | Jul 23, 2024 | Frequently Asked Questions
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...
by Pi Accountancy | Jul 18, 2024 | Allowances, Frequently Asked Questions
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...
by Pi Accountancy | Jul 17, 2024 | Allowances, Frequently Asked Questions
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...
by Pi Accountancy | Jul 16, 2024 | Frequently Asked Questions, Self Assessment
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....
by Pi Accountancy | Jul 11, 2024 | Frequently Asked Questions
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...
by Pi Accountancy | Jul 10, 2024 | Frequently Asked Questions
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...
by Pi Accountancy | Jul 4, 2024 | Business
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...
by Pi Accountancy | Jul 3, 2024 | Frequently Asked Questions
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...
by Pi Accountancy | Jun 28, 2024 | Frequently Asked Questions
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...
by Pi Accountancy | Jun 26, 2024 | Frequently Asked Questions
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...
