The Christmas Work Break-up Party
The Christmas break is on the way, and many businesses will be planning their annual year-end break-up party. However, an important issue for businesses to consider is the possible FBT and income tax implications of providing ‘entertainment’ (including Christmas parties) to staff and clients.
Under the Tax Act, employers must choose how they calculate their FBT entertainment liability and most use either the actual method or the 50/50 method. Under the actual method, entertainment is normally split up between employees (and their family) and non-employees (e.g., clients/suppliers). Expenditure on employees is liable to FBT and deductible. Expenditure on non-employees is not liable to FBT and is not tax-deductible.
Contact Solve Accountants located on the Gold Coast, Qld Australia if you need help with your business tax.