tax credit

1) The tax allowance associated with the dividend paid by a company. The shareholder is given allowance for the tax paid at source by the tax credit, at the same rate, 10/90; i.e. a dividend of £90 received by the shareholder had an associated tax credit of £10. For those whose taxable income does not exceed £32,400 there is no further tax to pay. For those whose income is higher, the excess is chargeable at a rate of 32.5%.
2) Any other allowance against a tax liability.
3) In the UK, a social security payment such as the Working Tax Credit or Child Tax Credit that is administered by the Inland Revenue. Despite their titles, neither of these payments affects the amount of tax that is payable.

Accounting dictionary. 2014.

Look at other dictionaries:

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