BEP 355 – Discussing Taxes (Part 1)

Hello and welcome back to Business English Pod. My name’s Edwin, and I’ll be your
host for today’s lesson on English collocations related to taxes.

There’s an old saying in English that “nothing is certain except death and taxes.”
But, although taxes are certain, the exact amount you have to pay isn’t. Just ask
any accountant. For both companies and individuals, there are all sorts of ways to
lower your tax bill. And a lower tax bill means more money in our pockets, or in our
shareholders pockets. For this reason, tax is a popular topic of discussion,
especially in the spring when most taxes are due.

In this lesson, we’ll listen to three managers at Brando Equipment discuss their tax
situation. During the conversation, the managers use a lot of common expressions
related to taxes. We call these expressions “collocations.” A collocation is just a
group of words that go together naturally.

Some English collocations, such as “take a chance,” are widely used. But many
collocations are particular to a certain field of work or topic. And to work in that
field or discuss that topic, you need to know these special expressions. When it
comes to taxes, for example, you need to know that we use the verb “file” with
“taxes” to talk about our yearly report to the government. Learning collocations like
this in different fields will develop your vocabulary and help you sound more
natural.

In the dialog, we’ll hear Christie, Glen, and Ivana discuss the tax situation at
Brando Equipment, a subsidiary their company has recently purchased. Glen and
Ivana are corporate managers, while Christie is an accountant. The three
colleagues use many English collocations and vocabulary specific to taxes as they
talk about how much tax Brando Equipment owes.

As you listen to the dialog, try to answer the following questions:

1. What does Ivana hope that they finish by the 30th of the month?
2. Near the start of the conversation, what does Christie say is higher than they
anticipated?
3. What key piece of information does Glen want to know?

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Vocabulary

Tax return: the forms on which you submit your income, business details, and tax
calculations to the government; “In the United States, March 15 is the deadline for
corporations to submit their annual tax returns.”

On track: making progress as expected; “I thought the project was on track, but
now Marla is telling me that there have been some delays?”

To wrap up: to complete something; “I’ll be able to help you a bit later today, once
I wrap up these website revisions.”

At the finish line: the official end of something, such as a process or project; “It
feels so good to finally be at the finish line of this huge construction project.”

To follow recommended practices: to use methods or techniques that are

considered professionally acceptable; “I’d like to call in an accountant just to make
sure I’ve followed recommended practices in these financial statements.”

To a T: perfectly or exactly; “The suit fits you to a T, but I’m just not sure the color
looks good on you.”

To shape up: develop or happen in a certain way; “So Brent, how are the new office
designs shaping up? Almost finished?”

Question marks: doubts or uncertainties; “Tom seems like a good candidate in most
ways, but there are just a few question marks about his work history.”

Outfit: company; “Before being hired by IBM, I worked for a small tech outfit in
Nevada for a year.”

A heads up: a warning or message to prepare for something; “Just a heads up

everyone: the CEO will be paying us a visit tomorrow, so let’s make sure the office
looks good.”

To report income: to officially state how much you or a company earned in a year;
“We are reporting higher income this year, but our costs went way up so our net
profit is actually lower.”

To lower a tax burden: to reduce how much you or your company has to pay in
taxes; “One easy way to lower your personal tax burden is by contributing to a
retirement plan.”

Favorable tax regime: a government or territory with low corporate tax rates; “With
zero percent tax on corporations, many Caribbean companies – such as the
Bahamas and Bermuda – have highly favorable tax regimes.”

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Effective tax rate: an average tax rate in a country or territory, expressed as a
percent; “Donald Trump cut the effective tax rate on American corporations from
35% to 21%, the lowest rate since 1939.”

To offset tax / To offset a cost: to balance a cost such as tax by reducing other
costs or finding some benefit; “The government is offering a rebate on new heating
and cooling technologies to offset the costs of going green.”

To levy: to charge a tax, duty, fee, or fine; “Foreign manufacturers are upset that
our government is now levying a duty on all imports.”

To cut to the chase: to start talking about the most important information rather
than giving background or irrelevant information; “Come on Dana, cut to the chase
here. Are you staying with us or leaving the company?”

Headline figures: the most important numbers in a report; “We don’t have much
time left, so I’ll just run through the headline figures on our monthly sales report.”

Ins and outs: all the details or facts of a situation; “I don’t know all the ins and outs
of Diane and Jake’s relationship, I just know that they can’t work together.”

Tax payable: the amount of tax you owe; “I hired an accountant to do my personal
taxes this year, and he got my tax payable down by 5%.”

To put something at: to calculate a number; “I’ve looked at the forecasts for next
year, and I put our growth at about 4%.”

Tax rebates: a policy that reduces how much tax you have to pay, or money you
receive because you have paid too much tax; “The government has just announced
a series of new tax rebates to encourage small business.”

Carry forward of losses: applying an operating loss in one year to future years in
order to reduce tax; “Finance says that last year’s carry forward of losses has
served to reduce this year’s tax bill to $100,000.”

To anticipate: to expect something to happen; “Economists can predict some future

trends, but they can’t anticipate influential crises such as the corona virus.”

To set aside money for taxes: to regularly save money to pay taxes in the future;
“As a self-employed person, I make sure I set aside about 20% of my income for
taxes.”

Fiscal: a company’s official financial year; “A lot of organizations are trying to move
some money off their books before the end of fiscal.”

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Dialog

Ivana: Yeah that’s what I thought too… but can we move on to look at the tax
return for Brando Equipment? We’re on track to get that wrapped up by the
30th, right?

Christie: That’s right. I think we’re almost at the finish line. You know how Joan
likes to follow recommended practices to a T on things like this. So not there
quite yet. But just wanted to update you both on how things are shaping up.

Glen: Good… There were a few question marks when we bought this outfit, so
curious to know how things are looking.

Christie: Yes, so… first off, just a heads up that we’re reporting a higher gross
income than originally anticipated.

Ivana: Not a bad problem to have.

Glen: Well… not as long as we can find ways to lower the tax burden. Which is
what we pay you for. So I’m hoping for good news there.

Christie: Yeah, well it certainly helps to have a favorable tax regime. The most
recent cut brought the effective tax rate down to 10%, so… lots to be happy
about there.

Ivana: And that’ll help offset the tax they’ve levied on some of that imported
equipment, am I right?

Christie: Yes, that will help a bit…

Glen: Hmm… I feel there’s a “but” coming on? Regardless, can we cut to the
chase and get to the headline figure. Then you can explain all the ins and outs
once we know what kind of money we’re talking about. I mean, what’s the total tax
payable?

Christie: Yes, certainly… was just about to get to that. Current calculations are
putting it at just under 200,000.

Glen: Wow, 200? Even with all these tax rebates? I mean, I didn’t think we’d
manage a carry forward of losses into next year, but 200K? I don’t think finance
anticipated this…

Ivana: It’s not that far off estimates Glen. They’ve been setting aside money for
Brando’s taxes since day one of this fiscal. They knew it was coming so it’s not a
big surprise…

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Debrief

Now let’s go through the dialog again and look at the language and collocations
used during the discussion.

Ivana: Yeah that’s what I thought too… but can we move on to look at the tax
return for Brando Equipment? We’re on track to get that wrapped up by the
30th, right?

Ivana wants to know if they’re ready to “wrap up,” or finish, the “tax return” for
Brando Equipment. In this case, “return” isn’t a verb, or something you do. It’s a
noun. And a “tax return” refers to the form you use to report your income and
other information necessary to calculate your taxes. This typically includes
expenses, investments, and special circumstances that might reduce your tax.

Completing your “tax return” is an inevitable part of business so let’s run through
some more examples.

§ We have to send in our tax return by March 31 to avoid any penalties.

§ Do you prepare your tax return yourself or do you have an accountant help you?

So does Christie think they can wrap up the tax return by the 30th of the month?

Christie: That’s right. I think we’re almost at the finish line. You know how Joan
likes to follow recommended practices to a T on things like this. So not there
quite yet. But just wanted to update you both on how things are shaping up.

Christie says they’re “almost at the finish line,” or almost done, but not quite. Why
not? Well, preparing a tax return, especially for a corporation, is very complicated.
And it’s important to do everything correctly, and truthfully. Or, as Christie says,
we need to “follow recommended practices,” which means completing a tax return
takes a lot of time and work.

Accounting isn’t always black and white. There are different ways to report income,
different ways to track expenses, and different ways to make all the necessary
calculations. The government expects companies to do their accounting work by
“following recommended practices,” or using accepted approaches.

How else can we use this expression “to follow recommended practices?” Let’s try a
few more examples.

§ If you follow recommended practices, then you won’t have anything to worry about.
§ The company paid a fine for not following recommended accounting practices.

Now back to the dialog, as Christie continues with her update on the tax situation.
As we hear, Glen is keen to listen as he had some doubts, or “question marks,”
when they first bought Brando Equipment.

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Glen: Good… There were a few question marks when we bought this outfit, so
curious to know how things are looking.

Christie: Yes, so… first off, just a heads up that we’re reporting a higher gross
income than originally anticipated.

The first thing Christie wants to report – or give a “heads up” about – is the
company’s income. As she says, they are “reporting” a higher gross “income” than
they expected to. This is one of the most fundamental tax collocations you can
learn: “to report income.”

When you “report” something, you officially declare it. When you report “income,”
you’re telling the government how much your company earned. On a tax return, it’s
very important to “report income” carefully, so let’s run through some more ways of
using this collocation.

§ Do we have to report all our income from overseas business activities?

§ We’re paying more tax because we’re reporting higher income than last year.

What do Ivana and Glen think about reporting higher-than-anticipated income?

Ivana: Not a bad problem to have.

Glen: Well… not as long as we can find ways to lower the tax burden. Which is
what we pay you for. So I’m hoping for good news there.

According to Ivana, reporting higher income is a good thing. It’s the entire purpose
of a business, in fact. But Glen is less excited. He likes higher income, but only if
they can find ways to “lower the tax burden.”

A “tax burden” is the amount of tax a company has to pay, or how much a certain
industry or market is affected by specific tax laws. Companies are always looking
for ways to pay less tax. Indeed, as Glen says, that’s what they pay Christie for; in
other words, her job is to find ways to lower the tax burden.

Let’s practice some more examples of this expression “to lower a tax burden.”

§ If we shift some of our assets to the Bahamas, we can lower our tax burden.
§ The cuts to business taxes has lowered the tax burden for many entrepreneurs.

So, what does Christie have to say about the company’s tax burden?

Christie: Yeah, well it certainly helps to have a favorable tax regime.

What is a “favorable tax regime?” Well, accountants work to lower the tax burden,
but they’re working within a specific country’s tax laws. Some countries have very
high tax rates, and some offer very low rates in order to attract businesses. When a
country has a low corporate tax rate, we say it has a “favorable tax regime.” In this
case, Brando Equipment is benefiting from this kind of regime.

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What are some other ways of talking about “favorable tax regimes?” Let’s run
through some more examples.

§ Ireland has one of the most favorable tax regimes in the EU.
§ We plan to open a subsidiary in a country with a more favorable tax regime.

Now let’s hear Christie give a bit more detail about the “favorable tax regime.”

Christie: The most recent cut brought the effective tax rate down to 10%, so…
lots to be happy about there.

As Christie says, the government charges an “effective tax rate” of 10%. The tax
rate is expressed as a percentage. It’s the percentage of a person or company’s
income that they have to pay as tax.

An “effective tax rate” might differ in meaning a little bit depending on who is using
it, but you can think of it as an “average” tax rate. Companies might pay a slightly
higher or lower rate, depending on their circumstances. But the average or basic
tax rate is the “effective” tax rate.

Let’s practice some more ways to effectively use this collocation.

§ The effective tax rate for corporations in the U.K. is 19%.

§ It makes sense to open our new office in a state with a lower effective tax rate.

Ivana has a question about the effects of this lower tax rate. Let’s listen.

Ivana: And that’ll help offset the tax they’ve levied on some of that imported
equipment, am I right?

Some rules or situations will raise our taxes, while others will lower them. And
when something increases our taxes, or any other cost, we look for ways to lower
something else. Or, as Ivana says, we try to “offset the tax or cost.” In this case,
she’s hoping the tax cut will offset the tax the government “levied” – or charged –
on some equipment the company imported.

When we “offset” a change or movement, we are trying to create balance through

an opposite change or movement. If you have to pay more in taxes, you might try
to “offset those taxes” by reducing other costs.

What are some other ways we can talk about offsetting costs such as taxes? Let’s
try some more examples.

§ Is there any way we can offset these taxes by reducing other costs?
§ We should be able to claim a tax credit to offset taxes paid on overseas income.

Christie agrees that the lower tax rate will help, but only a bit. And as we can hear,
Glen is becoming impatient.

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Christie: Yes, that will help a bit…

Glen: Hhm… I feel there’s a “but” coming on? Regardless, can we cut to the
chase and get to the headline figure. Then you can explain all the ins and outs
once we know what kind of money we’re talking about. I mean, what’s the total tax
payable?

Christie has been talking about the general situation of Brando Equipment, but Glen
wants her to “cut to the chase.” That means he wants to get to the most important
information, rather than hearing about all the “ins and outs,” or details.

That most important piece of information is, as Glen says, the “tax payable.” Your
tax payable is what you owe after all the adjustments to your income and expenses
are calculated. In other words, it’s the specific amount of your tax burden. In this
case, Glen is impatient to know the final number.

Let’s run through some more ways of using this collocation “tax payable.”

§ Based on my calculations, the tax payable is just $5,000.

§ Our tax payable includes all state and federal taxes owed for the year.

Now let’s listen as Christie gives Glen the headline figure.

Christie: Yes, certainly… was just about to get to that. Current calculations are
putting it at just under 200,000.

Glen: Wow, 200? Even with all these tax rebates?

Glen is surprised that the company’s tax payable is so high. He thought it might be
lower because of several “tax rebates.” A tax rebate is basically anything that
lowers the amount of tax we have to pay on something. A tax rebate can also mean
a tax refund, which we get when we have paid more in tax than we actually owe.

How else can we use this collocation “tax rebate?” Let’s try some more examples.

§ The government is offering tax rebates to manufacturers to help the economy.

§ These tax rebates are going to help reduce our overall tax burden.

Now let’s hear Glen continue expressing his surprise at the total tax payable.

Glen: I mean, I didn’t think we’d manage a carry forward of losses into next
year, but 200K? I don’t think finance anticipated this…

Glen is qualifying his surprise by saying he didn’t expect a “carry forward of losses”
from last year. A “loss” is a situation when you don’t have a net profit, which means
you probably won’t have to pay any tax. If you “carry forward” a loss, you are using
it to reduce your taxable income in future years. So if you lost 100,000 this year,

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then next year you may be able to reduce your reported income by 100,000. That
way, you’ll pay less tax.

Glen is saying that he didn’t expect to be able to use a “carry forward of losses,”
but he’s still surprised at a tax bill of $200,000.

A “carry forward of losses” can be a useful thing to have so let’s practice a few
more examples.

§ Last year’s carry forward of losses has helped lower this year’s taxes to almost zero.
§ Yes it was a bad year, but the carry forward of losses will help us next year.

Does Ivana share Glen’s surprise about how much they owe? Let’s listen.

Ivana: It’s not that far off estimates Glen. They’ve been setting aside money for
Brando’s taxes since day one of this fiscal. They knew it was coming so it’s not a
big surprise…

No, Ivana is clearly not surprised. As she says, it’s close to what they estimated, or
expected. And the company has prepared for this situation. They have been
“setting aside money for taxes” since the start of the “fiscal” or financial year.

Setting aside money means regularly saving money for a specific purpose. If you
anticipate a large expense, such as a tax bill, then it’s a good idea to “set aside”
some money each month. What are some other ways of talking about setting aside
money for taxes? Let’s run through some more examples.

§ We’ve been setting aside $3,000 a month for taxes, but I don’t think it’s enough.
§ Tax is already deducted from your paycheck so you don’t need to set aside any
money for taxes.

So, Christie has delivered a good summary of the tax situation. And despite Glen’s
surprise, it sounds like the company is prepared for their final bill.

Now it’s your turn to practice some of the collocations we’ve looked at in this
lesson. In a moment, you’ll hear a series of sentences with a word replaced with a
beep. Repeat the whole sentence, including the missing word. Remember, a
collocation is two or more words that we commonly use together, so pay close
attention to the words before the beep.

For example, if you hear:

Example cue: My adviser told me to set aside <beep> for taxes every month.

You can say:

Example answer: My adviser told me to set aside money for taxes every month.

After each response, we’ll provide the correct answer. Ready? Let’s give it a go.

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Cue 1: Make sure you sign your tax <beep> before sending it in.
Answer:

Cue 2: Some countries have lowered their effective tax <beep> to attract business.
Answer:

Cue 3: Our accountant did a great job of lowering our tax <beep> this year.
Answer:

Cue 4: Finance says we need to report <beep> earned outside the country.
Answer:

Answer 1: Make sure you sign your tax return before sending it in.
Answer 2: Some countries have lowered their effective tax rate to attract business.
Answer 3: Our accountant did a great job of lowering our tax burden this year.
Answer 4: Finance says we need to report income earned outside the country.

That’s all for this lesson on collocations for talking about taxes. We’ve covered lots
of vocabulary and collocations for talking about a company’s overall tax situation.
In our next lesson, we’ll hear the group use more collocations as they dig into some
of the specific issues that factored into the final tax bill.

Thanks for listening and see you again soon!

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Language Review

A. Collocations

Match the collocations in the box and then use them to complete the sentences
below. (If necessary change the tense of verbs to fit the context, i.e., to past or
future tense.)

Favorable Income

Carry forward of A tax burden

To set aside Losses
To report Money for taxes
To lower Tax rate

To follow Rebates
Recommended
Effective
practices
Tax Tax regime

1. In many Eastern European countries, the ________________

________________ on corporations is under 10%.

2. It was not a good year for the business, but at least that means a
________________ ________________ to next year.

3. Of all European countries, Luxembourg is known to have one of the most

________________ ________________.

4. This year, we are ________________ ________________ from product sales

and capital gains from the sale of equipment.

5. The auditor has criticized us for not ________________ ________________

in the preparation of our year-end books.

6. Finance is suggesting we wait until next year to purchase new machines so we

can benefit from the government’s proposed ________________
________________ on equipment.

7. If you don’t ________________ ________________ every month, you’re

going to be hit by a pretty big bill at the end of the year.

8. Giving to charity is a great way to ________________ your

________________ and improve your reputation.

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