Difference Between FRS102 & FRS105 (UK Accounting) Questions often arise as to the suitability of each standard depending on whether the client is a micro-entity or small entity. At the outset it is worth noting FRS 105 is an optional standard. Just because a micro-entity may be eligible to use FRS 105 does not mean it has to (and there are genuine reasons why FRS 105 may not be appropriate to a micro-entity). FRS 105 should therefore be considered on a case-by-case basis. FRS 102 FRS 102 contains a separate section in the form of Section 1A Small Entities. FRS 102, Section 1A only deals w ..read more

The government has now cancelled the corporate tax’s April 2023 planned increase. No matter how much profit a company makes, the rate will stay 19% starting in April 2023 rather than increasing to 25%. In September, a mini-budget was created, which included a rise in the corporate tax rate, among other changes. The new UK chancellor, Jeremy Hunt, almost entirely repealed Liz Truss’s mini-budget. One of the first tax cuts was the proposal to halt a corporate tax increase. What is Corporate Tax? Companies, public corporations, and unincorporated associations like industrial and provident societ ..read more

Rental Income Rental income is the rent you get from your tenants. This includes any payments for: the use of furniture charges for additional services you provide such as: cleaning of communal areas hot water heating repairs to the property Paying tax on profit from renting out your property You must pay tax on any profit you make from renting out property. How much you pay depends on: how much profit do you make your circumstances Your profit is the amount left once you’ve added together your rental income and taken away the expenses or allowances you can claim. If you rent out more ..read more

Tax Implications of Business Car Leasing Before I start on the tax implications of Business car leasing, it is important to understand what is Business car leasing exactly: Leasing a car for business is a financial agreement between a finance provider and a company for a brand-new vehicle for fixed monthly payments. There’s even the option to lease multiple models if your employer needs a fleet, like a taxi firm would, for example. Initial payment is required at the start of the deal, which will be put towards the total cost of the lease price. This upfront amount is worked out as multiples of ..read more

Year-End Adjustments Limited companies have a statutory obligation to file annual reports of their financial performance at their year-end to HMRC and Companies House. A company’s financial year-end is dependent upon the date they incorporated – usually the last day of the month of the day they registered as a company with Companies House – but can be changed or extended if more time is needed to complete reporting (you can shorten your financial year-end date as many times as you want, but you can only extend by a maximum of 18 months and only once every 5 years). The reports that need to be ..read more

Value-based pricing is nothing but a pricing strategy that determines the price of the goods or services by the value it provides to the user. In other words, accounting services can charge their customers according to their benefits, such as more precise financial reports, lower tax bills, and more control over their money. Accounting services providers in the UK can set themselves out from the pack and present themselves as trusted advisor by charging their customers depending on the value they provide. Furthermore, this helps demonstrate their worth by shifting their emphasis from the feat ..read more

Balancing Charge Definition of Balancing Charge A balancing charge is a means of making sure you don't claim too much tax relief on the cost of an asset you buy for your business. It'll increase the amount of profit you have to pay tax on. A balancing charge is the opposite of a capital allowance, which reduces the amount of profit you have to pay tax on. When you buy a large piece of equipment, you may be entitled to claim capital allowances on the cost of that item, either all at once via the Annual Investment Allowance (AIA), or spread over several years. If you later sell that item for mor ..read more

Balancing Charge Definition of Balancing Charge A balancing charge is a means of making sure you don't claim too much tax relief on the cost of an asset you buy for your business. It'll increase the amount of profit you have to pay tax on. A balancing charge is the opposite of a capital allowance, which reduces the amount of profit you have to pay tax on. When you buy a large piece of equipment, you may be entitled to claim capital allowances on the cost of that item, either all at once via the Annual Investment Allowance (AIA), or spread over several years. If you later sell that item for mor ..read more

FRS 102 FRS 102 applies to financial statements that are intended to give a true and fair view of a reporting entity’s financial position and profit or loss for a period. It applies not only to companies but also to public benefit and other types of entity. Reduced disclosures area available for the individual accounts of qualifying subsidiaries and parents. Section 1A Small Entities sets out the different presentation and disclosure requirements available to small entities. FRS 102 is based on the IFRS for SMEs, however the text of the IASB’s standard has been amended in some significant resp ..read more

Capital Expenditure vs. Revenue Expenditure A business organization incurs expenditures for various purposes during its existence. Some of these expenditures are meant to bring in more profits for the organization in the long term, while some are for a short time. The main reason for incurring expenditure is to increase the efficiency of the business and drive higher returns. Based on the nature of the spending, they are categorized as capital expenditure and revenue expenditure. Meaning of Capital Expenditure An organization's expenditures for long-term benefits are known as capital expenditu ..read more