Category Archives: Accounting

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16 Accounting Terms and Definitions to Know as a Business Owner

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The world of accounting is known for being a little heavy on the jargon and technical terms. According to Go Remotely’s Accounting Statistics, 60% of small business owners don’t think of themselves as being knowledgeable about finances and accounting.

Sound like you?

While you won’t need to know everything when it comes to accounting terminology, there are a few key terms that will help you out – a little knowledge of good accounting practices can make all the difference for your business.

So, here’s our list of the 16 most useful accounting terms to know as a business owner, in alphabetical order.

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How to Choose the Right Accountant: A 5-Step Guide

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Choosing accountants to work with is no easy task.

Perhaps you’ve just started your business and the accounting demands have begun to take up too much of your time. Or maybe you’ve had somebody taking care of your tax needs for years and you just need a change. Either way, it’s important to find an accountant who can meet your needs.

The truth is, the decision depends on you and your business circumstances.

So, while we’re not going to tell you that we’re the perfect accountants for you (although there’s a good chance that we might be – discover who we work with to find out!), we are going to talk you through the steps you should take to make an informed decision, so that you can find the perfect accountant for you.

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How can the Marriage Allowance save you money?

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There are many financial and legal benefits to being married or in a civil partnership, but one of the most overlooked reasons is the potential for tax relief.

This is because, thanks to the Marriage Allowance, where one partner earns below the tax threshold, they can transfer a portion of their personal allowance to the other partner, reducing the amount of tax they need to pay.

Am I eligible?

The Marriage Allowance relies on one spouse earning below their Personal Allowance of £12,570 per year. This can be through not working, having a low-paying or part-time job, or being retired.

The other partner must be paying the basic tax rate to receive the allowance, meaning their annual income must be between £12,571 and £50,270 per annum.

If this is the case, the lower-earning partner can transfer up to £1,260 of their personal allowance to their higher-earning partner.

How does it work?

By transferring part of your personal allowance to your partner, you increase their personal allowance up to £13,830. This reduces the portion of their income that they are liable to be taxed on, saving them up to £252 per year.

It is important to bear in mind that this transfer reduces the personal allowance of the lower-earning partner by the same amount, meaning that if they earn over £11,310, they are liable to pay tax.

Despite this, it is often still worth the transfer, as the lower-earning partner will still be paying a lower amount of tax, and it will contribute to an overall saving for both partners.

How do I get it?

You can apply for Marriage Allowance on the Government website if you fit all the criteria mentioned above.

If you or your partner were born before 6 April 1965, you may benefit more by applying for Married Couple’s Allowance instead.

It is also possible to backdate the claim to include any tax year from 5 April 2019, meaning that you and your partner can get further reductions to your tax bill.

If you are unsure whether the Marriage Allowance will benefit you and your partner, get in touch with our experts today for help and advice.