Small Business Tax Dictionary
You didn't get into business to become a tax expert. So use our helpful guide to understand all the terminology instead.
Apportionment
Apportionment is the process of dividing home office expenses between personal and business use — an essential concept for claiming accurate home office deductions.
Corporation Tax
Corporation Tax is a UK tax on the profits of limited companies and some other organisations. Understanding it is vital for UK businesses managing financial planning and legal compliance.
Deductible Portion
The deductible portion is the percentage of home costs that can be claimed as business expenses in New Zealand — covering rent, mortgage interest, utilities and more.
Depreciation
Depreciation is the gradual reduction in value of assets such as furniture, equipment, or computers used in a home office — and a deductible business expense.
Exclusive Use Area
An exclusive use area is a portion of your home dedicated entirely to business operations, with no personal use — a key qualifier for home office tax deductions.
Fringe Benefit Tax (FBT) — NZ
FBT is a New Zealand tax on non-cash benefits provided to employees or their associates — paid by the employer and separate from income tax.
Fringe Benefits Tax (FBT) — Australia
FBT is an Australian tax levied on non-cash benefits that employers provide to employees or associates — paid by the employer and separate from income tax.
GST (Goods and Services Tax) — Australia
GST is a value-added tax in Australia levied at 10% on most goods, services, and other items sold or consumed within the country.
GST (Goods and Services Tax) — NZ
GST is a value-added tax levied at 15% on most goods, services, and other items sold or consumed in New Zealand.
Home Office Deduction
The home office deduction allows individuals who use part of their home exclusively for business to deduct a portion of related expenses from their taxable income.
KiwiSaver
KiwiSaver is a voluntary, long-term savings scheme in New Zealand designed to help individuals save for retirement, with contributions from employees, employers, and the government.
National Insurance
National Insurance is a UK system where contributions are made by employees, employers, and the self-employed towards certain state benefits including the State Pension.
Occupancy Expenses
Occupancy expenses are costs associated with owning or renting a property used for business purposes — such as rent, mortgage interest, property taxes, and insurance.
PAYE (Pay As You Earn) — NZ
PAYE is a withholding tax system in New Zealand where employers deduct income tax and other deductions directly from employees' wages or salaries.
PAYE (Pay As You Earn) — UK
PAYE is the United Kingdom's system for collecting income tax and National Insurance contributions directly from employees' wages or salaries.
PAYG (Pay As You Go)
PAYG is an Australian system for paying amounts towards an individual's or business's expected annual income tax obligation throughout the year.
Record Keeping
Record keeping is the systematic recording and maintaining of financial documents — essential for supporting tax deductions and ensuring compliance during audits.
Running Expenses
Running expenses are the costs associated with using a specific area within your home for business — such as electricity, heating, phone bills, and internet charges.
Simplified Expenses
Simplified Expenses is a UK system that allows small businesses and self-employed individuals to calculate certain business expenses using flat rates, reducing admin burden.
Small Business Tax Glossary
A comprehensive guide to tax terminology for small business owners in Australia, New Zealand, and the UK — from GST and PAYE to home office deductions and depreciation.
Square Meter Rate Rule (NZ IRD)
The Square Meter Rate Rule is a New Zealand IRD method for calculating home office deductions by comparing business floor area to total home area.
Superannuation
Superannuation is a government-mandated retirement savings programme in Australia, with contributions from employers and employees invested to generate retirement income.
Tax Credit
A tax credit is a direct reduction in tax liability, allowing taxpayers to offset the amount of taxes they owe — and in some cases, receive a refund.
Tax Deduction
A tax deduction is an expense that reduces your taxable income, lowering the amount of tax you owe. Understanding deductions helps businesses minimise their tax liability legally.
Tax Liability
Tax liability is the total amount of tax that an individual or business owes to tax authorities for a specific period — the foundation of tax planning and compliance.
Tax Return
A tax return is an official document filed with tax authorities detailing income, deductions, credits, and taxes owed — the cornerstone of annual tax compliance.
Tax Year
A tax year is a specific 12-month period for which taxes are calculated and reported — the timing framework that determines when income, deductions, and credits are recognised.
VAT (Value Added Tax)
VAT is a consumption tax in the United Kingdom levied at 20% on the value added to goods and services at each stage of production or distribution.