

How a bookkeeper for small business would calculate its client prepayments
Suppose that you as business owner enters into a 1 year service to rent a software for £1200 in June 1 2025 and your year-end is March 31 2026. You paid up front in June 2025 the £1200. To calculate the June 2025 software expense charge, the bookkeeper for small business would to the following accounting entries: As you can see by crediting £1,100 of the total invoice of £1,200, £100 are left in the current month as a software expense charge in Profit and Loss and £1,100 is
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How a Bookkeeper for small business owner calculates payroll (PAYE) deduction
Suppose your business has one employee earning a gross annual salary of £55,000. To calculate the taxable income, you will first need to deduct the Personal Allowance for £12,700. So the taxable income is: £55,000 - £12,570 =£42,430.00 The £42,430 taxable income falls under the high earner tax rate band and hence a tax rate of 40% applies to part of the salary. Hence, you need to know the employment Income tax salary bands. Suppose they are still: Up £37,700 a 20% tax rate ap
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How an accountant for Sole Trader calculates its client capital allowances:
The simplest allowances a Trader could claim when using the accrual method of accounting is the Annual Investment Allowance (AIA) The Sole Trader has until £1m to claim (as of 2025) which means that He/She would get 100% of the cost as a deduction from trading profits. But let’s suppose you have bought a car which is petrol and high emissions. In such case a car would NOT classify for the AIA and as such you need to claim Witting Down Allowances. It works as follows: Suppose
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A small business bookkeeper can save your business from financial penalties
A small business bookkeeper can save your business from financial penalties
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