allowance for tax

Meanings

1. 1phrasecountablefinancebusiness

   an amount of money kept in a company's accounts to pay tax later.

   Grammar: Often used with 'make', 'provide', or 'create': 'make an allowance for tax'.

   Patterns

   • make an allowance for tax
   • provide an allowance for tax
   • an allowance for tax of £...

   The company made an allowance for tax of two million pounds.

   Analysts raised their allowance for tax after the new rules were announced.

   The accounts show a large allowance for tax payable next year.

2. 2phrasecountablefinancebusiness

   a reduction in the amount of tax you must pay.

   Grammar: Often followed by 'on': 'an allowance for tax on savings'.

   Patterns

   • an allowance for tax on something
   • give an allowance for tax

   The government offers an allowance for tax on charitable gifts.

   There is a small allowance for tax on the first part of your income.

Word forms

Common combinations

make an allowance for tax

The firm made an allowance for tax in its year-end accounts.

an allowance for tax payable

The allowance for tax payable was increased this quarter.

a generous allowance for tax

Investors benefit from a generous allowance for tax on pensions.

reduce the allowance for tax

The new budget reduces the allowance for tax on fuel.

Synonyms and how they differ

tax provision

A more technical accounting term for the same idea.

tax deduction

Focuses on the amount taken off your tax bill, not the money set aside.

Word family

allow verb

To permit or to include in a calculation.

allowable adjective

Allowed by tax rules, as in 'allowable expenses'.

Commonly confused: allowance for tax or tax allowance?

Practice

Make it your own

Write a sentence using “allowance for tax”, then check it and compare it with the examples above.

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