Christmas Gifts & Events

A stack of Christmas presents with different sizes and wrapping papers on top of each other. Make your Christmas wishes come true with the help of our small business accountants.

As the year-end approaches, it’s prudent to focus on tax planning and consider the Christmas benefits’ potential tax and Fringe Benefits Tax (FBT) implications.

The area is quite complex, but in general terms, the rules for a taxable employer are as follows;

  • Staff gifts such as a bottle of wine, gift basket or gift card are tax deductible and FBT exempt if the value is below $300 (inclusive of GST) per person.
  • Client Gifts represent a valid business expense and would be deductible for tax and GST purposes and not subject to FBT.
  • Christmas party and Dinner at a restaurant – this is considered a private meal/entertainment and will not be tax deductible or be eligible for a GST claim to the employer. FBT may be applicable if the value of the meal/entertainment for each person exceeds $300 (applicable to both the staff and the spouse/partner of the staff). A tax deduction and GST claim can be made when FBT is paid.
  • Taxi Travel to the party and home – FBT does not apply to taxi travel where the trip starts or ends at the workplace. The trip home from the restaurant, strictly speaking, is subjected to FBT, but you might be able to get an exemption by claiming the minor and infrequent benefit rule. GST can be claimed on these amounts.
  • Gift for the boss (or the S&W partners) – not deductible to employees but will be greatly appreciated!
  • The $300 Minor & Infrequent benefits rule – As referred to above, to be eligible for this exemption, a benefit must be minor (less than $300 GST inclusive) AND infrequent).

Here at S&W, we had another excellent staff Christmas party on the 5th of December. We were tasked with the Great Gatsby (1920s) look. Click here for a run down and some photos of the night.

Contact us if you have any questions.

*Correct as of December 2014

Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.

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