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...
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...
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...
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...
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...
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...
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...
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...
