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Written by GCT Admin   
Tuesday, 20 November 2018 14:57

Tax Services for Your Christmas Parties

 

Christmas is fast approaching. In order to properly plan for any unforeseen tax problems, we provide a tax guide for your Christmas party.

Christmas party for employees (including family members and clients)

 

On-site Christmas party

If you are having a Christmas party, holding it on the business premises on a working day is usually more tax effective than holding it off-site. Food and drinks (including alcohol) are exempted from FBT for employees with no dollar limit, but no tax deduction for GST can be claimed. Where family members (or associates) attend and the costs of each family member (or associate) is $300 (inc. GST) or more, there is FBT on the associate’s portion of food and drink, and a tax deduction and GST credit can be claimed on the portion of the costs.

 

Where the Christmas party is held on a working day at the business premises with only employees and clients including finger food, light meals and provided with no alcohol, then there is no FBT, the entire cost is tax deductible and a GST credit can be claimed.

 

Off-site Christmas party

Christmas parties held off the business premises are exempted from FBT where the cost for the employee and their associates is less than $300 (inc. GST) per attendee. However, no tax deduction or GST credit can be claimed.

 

Gifts to employees

 

Gifts provided to employees or their associates are normally subject to FBT, unless the minor benefit exemption applies. For a minor benefit exemption to apply, it must be provided to an employee or their associate on an “infrequent” or “irregular” basis and the cost is less than $300 “per benefit” (inc. GST). This is irrespective whether it is an entertainment expense or not (refer to table). However a tax deduction and GST credit can only be claimed if the item is a non-entertainment expense.

 

Gifts to Client

Gifts to a client are generally tax deductible as they are made for the purpose of producing future assessable income. However, if gifts are considered to be entertainment gifts, then no tax deduction or GST can be claimed.

 

Tax and Christmas Party (cont’d)


What is considered to be entertainment costs?

Entertainment

Not Entertainment

Airline tickets

Gift hamper

Theatre/sporting tickets

Bottle of wine or whiskey

Holiday accommodation

Perfumes

Hired entertainers

Flowers

Gym membership

Pen Set

 

Tax tip: Avoid entertainment costs to employees and clients, as they are not tax deductible, subject to FBT and GST cannot be claimed.

 

Call Max Accountants today on 07 5580 4455 and talk to the Gold Coast's Business Tax Experts for Tax & Property Investment for the Gold Coast, servicing Helensvale, Coomera, Pacific Pines and Pimpama.

Max Accountants Gold Coast - Rated 4.9 / 5 based on 27 reviewsReview us

 

 

Tax and Christmas Party

Last Updated on Monday, 05 August 2019 22:41
 


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