With the influence of international business, accounting and business jargon has become seriously complex and even confusing. I sometimes notice this when speaking to clients, who will use the wrong term for the wrong thing. It’s so important to mean what we say and say what we mean. Don’t make the wrong business move because you didn’t understand a business term. And if you need help with something, ask us, that’s why we’re here.
Each week I will post a business term and explain it from an accountant’s perspective. This week we’re talking about
Income is simply money which you receive in exchange for providing services and goods and even as a profit on an investment. Income can be implied in many ways. In business terms it implies to an amount after expenses, e.g. salaries, cost of running the machinery, raw materials etc. To an individual it generally means money coming in. It can be from:
- Trading income
- Property Income – UK & non UK
- Employment income
- Savings and investment income – Interest & Dividend
- Foreign Income
- Miscellaneous income
Some income is exempt from income tax such as:
- Income from National Savings certificates
- Premium Bond winnings
- Income from Betting and Lotteries
- Social security benefits e.g. (Housing benefit and winter fuel allowance)
- Income from ISA’s
- Dividend paid on the first £200,000 of Venture Capital Trust shares acquired in a tax year.
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