Another year has flown by and as we approach Christmas our attention often turns to rewarding hard working staff and Christmas parties.
With that in mind here are a few key considerations and reminders for small businesses should you be feeling merry!
·Non-entertainment gifts to employees are 100{b8e7c7f951a33340f874b6d86f318d9ec4412e46b7f65591a459ed670b119c83} tax deductible. Keep them under $300 per head and they won’t incur FBT under the “minor benefits exemption”
·Christmas parties, if hosted at your workplace (and only staff attend) are likely to be exempt from FBT. Cost per head must be less than $300 per head and certain conditions must be met.
·Christmas parties held off business premises (and only staff attend) will give rise to FBT unless the benefits are “exempt minor benefits”
·Christmas parties involving clients – there is no FBT Payable and the cost of the entertainment is not tax deductible.
**An exempt minor benefit is a benefit that has a value of less than $300. It is exempt from FBT if it would be unreasonable to treat it as a fringe benefit. (https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/In-detail/Getting-started/FBT-for-small-business/?page=23)
So, if you are involved in the administration of FBT for your organisation, plan ahead and consider the implications.
When planning your Christmas party list & checking it twice, consider:
· How much it costs
· Where and when it is held
· Who is invited
Consideration when buying Christmas presents or gifts:
· The amount you spend
· The type of gift ( gifts of wine or hampers are treated differently to gifts like tickets to a movie or sporting event)
· Who you are giving the gift to (there are different rules for employees vs clients)
Don’t get your tinsel in a tangle this festive season and contact us on 08 82119426 or admin@ttoca.com.au if you have any questions!
