Christmas Parties
Christmas will be here before we know it and many of you are no doubt looking forward to the annual office and client parties. In addition, many businesses will be considering what gifts, if any, they will provide to clients and employees. However, an important issue to consider is the possible Fringe Benefits Tax (FBT) and income tax implications of providing "entertainment" to staff and clients.
One major consideration is the "less than $300" minor benefit exemption and the fact that the Tax Office now accepts that different benefits provided at (or about) the same time are not added together when applying this threshold. Basically, this means that a Christmas party and gift may be exempt from FBT, even if provided at the same time, as long as each costs less than $300!
Entertainment and FBT is a complex area and there are different rules and implications for Christmas parties depending on whether it is held on an employers premsies or at a restaurant, involving just staff or staff and clients.
Please contact us for more information and to make sure that you don't end up with a tax hangover as a result of your Christmas festivities!
