This Silly Season don't forget the rules in relation to entertainment and Fringe Benefits Tax (FBT).
The tax office considers a Christmas Party an "entertainment benefit" and therefore FBT will apply.
However, if the cost per employee (including their spouse/family) is less than $300 this will be considered a Minor Benefit and thus exempt from FBT.
So, keep the cost down and avoid FBT. But don't forget that "entertainment" is not tax deductible nor is the GST able to be claimed.
What about gifts?
A non-entertainment gift to staff (such as beauty products, perfume, flowers, wine, and gift vouchers) is exempt from FBT if the total cost including GST is less than $300 and a tax deduction and claim for GST is allowed.
An entertainment type gift to staff (theatre tickets, holiday, movie tickets) will be subject to FBT. However, again, this can be avoided if the cost is less than $300. But, there is no deduction for tax purposes nor is a GST claim allowed.
A non-entertainment gift to clients or suppliers do not fall within the FBT rules and are allowable tax deductions and GST credit claims.
Need more information? contact me at sarah@willoughbys.com.au
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