Frequently Asked Questions

A tax code is an alphanumeric code used to work out how much income tax needs to be collected from a person's income. These codes generally start with a number and end with an alphabet, for eg. 1250L. The number in a tax code denotes the amount of tax-free income the person gets in that particular year.

Various types of trial balance errors are as follows: The error of Principle: When a transaction is recorded in a manner that any of the generally accepted accounting principles is violated then it is called an error of principle. There isn’t any effect on trial balance in such cases as the amount is correctly posted on debit-credit sides but the accounts are incorrect. Such errors can cause the financial statements to depict a misleading picture of the affairs of the business. Omission Error: There can be two kinds of error of omission- complete and partial. Complete omission means that a transaction has been missed to be recorded in the journal. There isn’t any effect on trial balance in such cases. Partial omission means that a transaction has been recorded in the journal but omitted to be posted into the ledger accounts. Such kinds of omissions hamper the agreement of trial balance.

Over reporting- Once you file your accounts to Companies House and HMRC, they come into the public domain. Over-reporting in the accounts can cause your competitors to know your business strategy and they could easily take undue advantage of this. Underreporting- Underreporting to Companies House and HMRC can cause them to take action against you. You might end up paying heavy penalties.

Filing your accounts well before the due date comes with its own benefits. Some of them are: You get ample time for amendment (if required). You don’t have to worry about deadlines. You don’t have to fear paying penalties for late filing. Businesses who wish to engage with you get a piece of timely updated information. You don’t haste, hence fewer chances of being prone to mistakes.

The HMRC Gateway account is an account created to use online services provided by HMRC. To sign in the HMRC gateway one needs 12 digit Government Gateway user ID and password.

Benefit in kind refers to: Asset or service provided by the employer to employee, that is used by employee personally but is paid for by a company and isn’t “wholly, exclusively and necessary” for business purpose.