Tag: entertainment

Happy friends enjoying on terrace. Smiling man and women are celebrating together during sunset. They are wearing casuals in party

FBT treatment of work Christmas parties and gifts

Posted on | by Allan Hall

Fringe Benefits Tax — What business owners need to know this Christmas

As the festive season approaches, you are likely planning your end-of-year functions and perhaps even thinking about Christmas gifts for valued customers and employees for another year.

During this period, it’s important to understand and be mindful of the implications of Fringe Benefits Tax on gifts and parties, to ensure that your generosity doesn’t cause unwelcome tax consequences for your business.

To help, we have set out the following guidelines to assist you:

Fringe Benefits Tax at Christmas

Christmas Parties

If your business lodges an FBT return calculating entertainment using the 50/50 method, then 50% of the cost of your Christmas party will be subject to FBT.

If you do not lodge an FBT return using the 50/50 method then the cost of your Christmas party will be exempt from FBT provided one of the following applies:

  • The Christmas party is held on business premises on a working day for current employees only, OR
  • The Christmas party costs under $300 per head.

If your business entertains your employees frequently (more than 10 times per year) then your Christmas party may be subject to FBT regardless of the cost, so please discuss this with your Allan Hall advisor first.

Example

  1. A law firm holds its Christmas party for employees only on a Friday afternoon in the office garden complete with marquee, live band, premium alcohol and a delicious banquet cooked by a celebrity chef. The cost comes to $490 per head. This will be exempt from FBT.
  1. An electrical company holds its Christmas party at a local restaurant with food, drink and entertainment. Ten employees and their spouses are invited making a total of 20 people. The total cost comes to $5,000. As this equates to $250 per head it will be exempt from FBT.

Customer Gifts

Gifts to customers are tax deductible and not subject to Fringe Benefits Tax, provided they are a genuine gift e.g. a Christmas hamper or a bottle of wine.  If you choose to take a customer out for a Christmas drink instead, your portion of this may be subject to Fringe Benefits Tax.

Staff Gifts

Gifts are a great way to show your employees how appreciative you are of their efforts whilst still attracting a tax deduction for your business. However, it’s important to understand that staff gifts over $300 will be subject to Fringe Benefits Tax.

Further, staff gifts under $300 should be eligible for the minor benefits exemption from Fringe Benefits Tax, but if they are recreational gifts (such as concert, cinema or sports tickets) then no income tax deduction or GST can be claimed.

Understanding the intricacies of Fringe Benefits Tax and the implications of FBT on your Christmas entertaining — gifts and parties — can be challenging. Many of our team offer skilled and highly experienced advice in all aspects of Fringe Benefits Tax, so please contact your Allan Hall Advisor for specific assistance before planning your Christmas functions and/or staff and customer gifts.

NOTE: If your business is a tax-exempt body or charity then a separate set of rules applies so please consult your Allan Hall Advisor.

CONTACT ALLAN HALL BUSINESS ADVISORS

Christmas Party

FBT Implications of work Christmas parties and gifts

Posted on | by Allan Hall

FBT Implications of Work Christmas Parties and Gifts

Fringe Benefits Tax — What business owners need to know this Christmas

As the festive season approaches, you are likely planning your end-of-year functions and perhaps even thinking about Christmas gifts for valued customers and employees for another year.

During this period, it’s important to understand and be mindful of the implications of Fringe Benefits Tax on gifts and parties, to ensure that your generosity doesn’t cause unwelcome tax consequences for your business.

To help, we have set out the following guidelines to assist you:

Fringe Benefits Tax at Christmas

Christmas Parties

A number of factors determine the application or exemption of Fringe Benefits Tax on your staff Christmas party and associated benefits, including your business type, where and when your function is to be held, your invitees and cost.

Example

If your business is not classified as a ‘tax-exempt body’, then the costs (such as food and drink) associated with Christmas parties are exempt from Fringe Benefits Tax, as long as they are provided on a working day on your business premises and consumed by current employees.

However, if you invite associates, customers or suppliers, Fringe Benefits Tax would then be determined by the per-head cost of the function. And if your event is hosted offsite, a new set of Fringe Benefits Tax implications arise.

Customer Gifts

Gifts to customers are tax deductible and not subject to Fringe Benefits Tax, provided they are a genuine gift e.g. a Christmas hamper or a bottle of wine.  If you choose to take a customer out for a Christmas drink instead, your portion of this may be subject to Fringe Benefits Tax.

Staff Gifts

Gifts are a great way to show your employees how appreciative you are of their efforts whilst still attracting a tax deduction for your business. However, it’s important to understand that staff gifts over $300 will be subject to Fringe Benefits Tax.

Further, staff gifts under $300 should be eligible for the minor benefits exemption from Fringe Benefits Tax, but if they are recreational gifts (such as concert, cinema or sports tickets) then no income tax deduction or GST can be claimed.

Understanding the intricacies of Fringe Benefits Tax and the implications of FBT on your Christmas entertaining — gifts and parties — can be challenging. Many of our employees offer skilled and highly experienced advice in all aspects of Fringe Benefits Tax, so please contact your Allan Hall Advisor for specific assistance before planning your Christmas functions and/or staff and customer gifts.

Contact Allan Hall Business Advisors today!

Christmas Gifts and Wrapping

FBT Implications of Work Christmas Parties and Gifts

Posted on | by Allan Hall

Fringe Benefits Tax

What You Need to Know for the Christmas Period

As Christmas approaches, you are likely to be planning your end of year function and perhaps thinking about Christmas gifts for your valued clients and employees. During this planning stage, it is important to understand and consider the implication of Fringe Benefits Tax on your gifts and parties, to ensure your generosity doesn’t cause unwanted tax consequences for your business.

We have set out the following guidelines to assist you throughout this period.

Fringe Benefits Tax at Christmas

Christmas Parties

A number of factors determine the application or exemption of Fringe Benefits Tax on your staff Christmas party and associated benefits, including: your type of business, where and when your function will be held, who is invited and how much it costs.

For example, if your business is not classified as a ‘tax-exempt body’, then the costs (such as food and drink) associated with Christmas parties are exempt from Fringe Benefits Tax, as long as they are provided on a working day on your business premises and consumed by current employees. If you invite associates, clients or suppliers however, Fringe Benefits Tax would be then determined by the per head cost of the function. And if you host your event offsite, a new set of Fringe Benefits Tax implications arise.

Client Gifts

Gifts to clients are tax deductible and not subject to Fringe Benefits Tax, provided they are a genuine gift e.g. a Christmas hamper or a bottle of wine.  If you choose to take a client out for a Christmas drink instead, your portion of this may be subject to Fringe Benefits Tax.

Staff Gifts

Staff gifts are a great way to show your employees how appreciative you are of their hard work whilst still getting a tax deduction for your business. However, it is important to understand that staff gifts over $300 will be subject to Fringe Benefits Tax.

Further, staff gifts under $300 should be eligible for the minor benefits exemption from Fringe Benefits Tax, but if they are recreational gifts (such as tickets to a concert, movie or sporting event) then no income tax deduction or GST can be claimed.

Understanding the intricacies of Fringe Benefits Tax implications on gifts and parties can be challenging. Many of our employees are highly experienced and skilled in all aspects of Fringe Benefits Tax, so please contact your Allan Hall Advisor if you would like some advice or assistance when planning your Christmas function, staff gifts or client gifts.

Contact Allan Hall Business Advisors today!