For many business owners and managers, working out the fringe benefits tax (FBT) implications of their office Christmas functions and gifts can cause a bigger hangover than overindulging at the party, says financial advisers HLB Mann Judd Sydney.
But the implications can be kept simple if costs are kept within the FBT threshold which is now quite generous, says Jol Dare, tax manager for HLB Mann Judd Sydney.
“The best tactic is to keep it simple by ensuring each ‘benefit’ provided to employees is under $300 so they qualify as minor benefits, which means they fall below the FBT threshold,” he explains. “While the requirements around reporting FBT are still fairly complicated, as long as the threshold isn’t exceeded, it should be much easier than in the past.”
Dare advises businesses to follow the below tips to ensure they don’t get a ‘FTB headache’ this Christmas:
- Split the benefits for employees between gifts and meals.
- Keep records of who attended the function.
- Account for all employee food, drink and gifts separately.
- Go out with a flurry of good tidings!
- Every good Christmas party is about knowing when to stop.