The festive season is upon us!
The sun is shining across the Macedon Ranges, and as we prepare to celebrate with family, friends, and colleagues, it’s time to plan those end-of-year gatherings.
If you’re a local business owner in Gisborne, Woodend, or surrounding areas, it’s important to be aware of potential tax implications associated with your holiday celebrations and employee gifts.
Here are the tax tips you need to know to stay informed and compliant.
Christmas Parties
Whether your office is based in Gisborne’s bustling business hub or nestled in the tranquil surroundings of Macedon or Riddells Creek, your Christmas party may have some tax consequences.
Here’s a breakdown:
1. Party Held on Business Premises
For employees only: No Fringe Benefits Tax (FBT) applies, but there’s no tax deduction or GST credit claimable either.
For employees and their guests/clients:
If the cost is under $300 per head, no FBT is payable, but you also can’t claim a tax deduction or GST credits.
If the cost is over $300 per head, the portion attributable to employee associates (e.g., their spouse/partner) is subject to FBT. This FBT portion can be claimed as a tax deduction, along with applicable GST credits.
2. Party Held Away from Business Premises
If the cost is under $300 per head: No FBT applies, but no tax deduction or GST credits can be claimed.
If the cost is over $300 per head: FBT applies for each employee and their spouse/partner. You can claim a tax deduction and GST credits for the FBT portion.
If clients attend: Regardless of cost, there’s no FBT for client expenses, but you also cannot claim a tax deduction or GST credits.
Pro Tip for Businesses: Consider combining a modest Christmas party with non-entertainment gifts like hampers. For example, if guests are provided with a small gift (under $300) at the party, you may claim the gift as a tax deduction, as it’s treated separately from the entertainment.
Christmas Gifts
Gifts are a fantastic way to show appreciation for your employees’ hard work throughout the year. When providing non-entertainment gifts (valued under $300), no FBT is payable. Examples include:
Christmas hampers (maybe featuring local produce from Macedon Ranges Hampers).
Bottles of wine (from a Lancefield winery).
Gift vouchers for experiences or dining (like local cafes like Woodend or Kyneton’s popular brunch spots)
Keep in mind: Entertainment gifts like event tickets or memberships have different tax rules and may incur FBT.
Still Unsure
If you’re uncertain about the tax implications of your celebrations or employee gifts, don’t hesitate to reach out to The Neill Family Group team. As your local accountant familiar with the Gisborne and Macedon Ranges community, we’re here to help your business enjoy the holiday season without unintended tax surprises.
Cheers to a prosperous festive season! 🎄
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