UK Accounting Glossary
Noun: the action of being abated or abating: subsiding or ending.
Law: the removal or reduction of a nuisance.
(often in legal use) the ending, reduction, or lessening of something.
Abatement refers to a reprieve from or reduction in debt, tax or other payment obligation faced by an individual or company.
The most common form of abatement is tax abatement.
Tax abatement is also an incentive utilized by cities to encourage the redevelopment of distressed areas by providing real property tax abatement and eminent domain. Another type of abatement is related to the payment of rent. If a building is destroyed by fire, water damage or another accident, a renter is usually granted abatement from making rental payments.
A lesser-known form of abatement is penalty abatement, commonly associated with the Internal Revenue Service (IRS). Penalty abatement can help an individual or business reduce or eliminate an IRS penalty and/or interest. To request penalty abatement from the IRS, certain requirements must be met. For example, penalty abatement might be granted if a business or individual is able to prove reasonable cause as to why they were unable to meet their tax obligations.
1. Commerce: Reduction in the amount of a bill or charge such as demurrage, overtime penalty, or rent.
2. Environment: Elimination or reduction of polluting or hazardous substances (such as asbestos) by either removing them completely or lessening their effect through better waste management.
3. Legal: Suspension of court action, or bringing it to a close before the final decision.
4. Taxation: Rebate given in levies or taxes under special circumstances, such as in the aftermath of natural disasters.
To reduce the intensity, amount or degree of a given activity.
Abatement is also used to describe the reduction of the emission of pollutants in environmental economics.
Technical abatement is a term used when referring to measures which involve production activities of businesses, for example, an introduction of a new, or an amendment to an existing process or technology.
Behavioural abatement is the changing of behaviours of consumers, or the changing of lifestyles in the customers.
The question of the amount of individual incomes only comes before the authorities when claims for exemption and abatement are made.
The investor was able to secure a tax abatement for the grade 2 listed building, in exchange for promising to create affordable housing for disadvantaged members of the local community.
The abatement of a nuisance is the suppression thereof.
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This glossary post was last updated: 27th January 2019.