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Tax Dictionary of Terms and Jargon Explained.

To use this Tax Dictionary, simply click on a word to get an explanation of the term. Short, concise tax jargon explained clearly and to the point. Examples are used where appropriate. Listed are tax terms, jargon and words which have legal meaning and or are used in this sector. UK Tax Rates

 

Output Tax

Output tax is the VAT that is charged on goods and services by a business that is VAT registered and has a VAT number.


Accruals Basis

A method of recording transactions to relate them to the period when the exchange of ownership of the goods, services or financial asset applies. For example, value added tax accrues when the expenditure to which it relates takes place, but HM Revenue and Customs receive the cash some time later. The difference between accruals and cash results in the creation of an asset and liability in the financial accounts, shown as amounts receivable or payable.

Crown Copyright. Material taken from National Statistics website: www.statistics.gov.uk. Reproduced under the terms and conditions of the Click-Use Licence.


Acquisition

1) This means to acquire. Usually refers to the takeover of a company.

2) Tax Definition:-

Receipt, by a person registered or liable to be registered for VAT, of goods that have been supplied by a registered person in another European Union (EU) Member State and removed from there to the UK.

Crown Copyright. Material taken from HM Revenue & Customs. Reproduced under the terms and conditions of the Click-Use Licence.


Advantages of Revenue

1) Advantages of revenue is the method of recording revenue for accounting and tax purposes. This can be different for different industries and countries. The main focus is that there is a uniformed method so there is consistency. The sales figures can be manipulated by intercompany transactions, instalments and contracts.

2) Advantages of revenue sharing agreements is where instead of purchasing products and services you exchange a share of the revenue of a project or new business. This reduces cost and shares the risk.

Age Relief

This is an allowance that is given when you reach a certain age. This allowance usually retirement age gives an additional allowance or increases their personal tax allowance. This means that they can earn more before they have to pay tax. If their earnings are over the tax allowance then they will have to pay tax on the amount over the allowance. This overall reduces their tax liability.



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