Tax Deduction

Tax deductions are costs that eligible businesses can deduct from their taxable profits to reduce their tax liability. Deductible allowances include the cost of utilities, office running costs, travel costs, certain staff costs, travel and vehicle costs, training and marketing costs, business rates, phone calls etc. Tax deductions differ from tax credits in that while both reduce tax liability, the former do so by deducting allowable expenses from taxable income and lowering the tax base while the latter do it by reducing the actual tax bill.