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We can’t build audiences if we don’t know anything about them. ADUK enables understanding of the impact and appeal of the arts - helping us through the maze of audience data, translating it into knowledge we can use.

Julie Tait, Culture Sparks

Jargon Buster

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Net income

What does this mean?

A figure for income received shown after deductions have been made for something (such as VAT, credit card charges or booking fees).

Generally – and with the exception of accounting statements where this may be unavoidable – the use of net figures should be avoided. Compare with GROSS INCOME.

How did we get this definition?

‘Net’ is a standard accounting term which denotes an amount of money after any necessary deductions have been made. However, common parlance often uses ‘net’ to mean ‘net of VAT’ (i.e. a sum of money after any relevant Value Added Tax has been taken away).

Related and similar definitions

For purposes of consistency it is suggested that any ‘net income’ figures should reflect the total monies being generated for an organisation. Hence it is recommended that ‘net’ should always be taken to mean:

The amount paid by a customer MINUS any deductions for VAT and also MINUS any deductions payable to another party (such as agency fees and credit card charges).

Given the potential for confusion here, unless there is a valid accounting reason, it is also strongly recommended that the use of ‘net’ figures be avoided.