Small businesses often strive for a high-profit margin, but what does this mean? What exactly is a profit margin and how is measuring it useful? What is a profit margin? A profit margin is the total difference between how much a business makes and the expenditures of said business. For a sole trader, this can …
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Fixed costs are a counterpart to variable costs, and are extremely useful when running a business. Knowing in full about the usage and definition of fixed costs is how effective budgeting is done. That being said, how exactly do you define fixed costs, and how do you use them? Defining fixed costs Fixed costs are …
Variable costs are a consistent worry for businesses of all sizes. What exactly are variable costs, however, and why is it a good idea to keep track of them? How to define variable costs A variable cost is defined as one that rises and falls with the production volume of the company. It can include …
Miscellaneous / By Kyra McKay UK Corporation Tax is calculated based on a business’s annual profits. It’s done in the same way that income tax is calculated for individuals. Unlike individuals, all business earnings are taxed as they do not get any form of tax-free allowance. There are, however, a variety of charges and deductions …
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UK Income Tax is a tax on your profits. When you earn more than your personal allowance, you must pay tax on the following sources of income: Employment Trust Rental Pension Savings interest Employment benefits Normally, you do not pay Income Tax on all of your taxable income. This is due to the fact that …
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The HMRC Construction Industry Scheme (CIS) determines how: Subcontractors in the construction industry should be paid Construction workers should invoice and account for value-added tax (VAT) Contractors either deduct then transfer: 20% of a registered subcontractor’s payment to HMRC 30% of an unregistered subcontractor’s payment to HMRC How does the Construction Industry Scheme work? If …
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Double-entry accounting is an accounting technique that records debit and credit for all business transactions. It gives a financial picture of a business’s finances. This technique is based on the accounting formula: Assets = Liabilities + Equity. Credits to one account must equal debits to another for the equation to be balanced. Accountants use debit …
Consider why single-entry bookkeeping is important, especially if you operate a small business. It will lead to clear transaction tracking, which could lead to success. What is double-entry bookkeeping? It enables a company to track all of its transactions and evaluate how well it is doing in terms of profitability, cash balances, and business development. …
Double-Entry vs single-entry Bookkeeping: the best option for small businesses? Read More »
Most people think about bookkeeping vs accounting interchangeably despite being quite different. While bookkeepers and accountants have similar goals, they support your business at different points of the financial cycle. When bookkeeping and accounting for your small business become too much to handle, it’s time to seek help. But do you need a bookkeeper or …
Bookkeeping vs Accounting: What’s the best choice for you? Read More »
The tax office assigns a tax code to everybody working or receiving income through PAYE (HMRC). Your tax code is important because it tells your employer how much income tax should be deducted from your pay. UK tax codes are made up of 3 or 4 numbers and one letter. For example, the tax code …
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