Christmas is expensive enough so don’t pay more tax than you have to during the festive season. Here are some ways to stop the tax man from spoiling your Christmas Cheer.
For People
Who can claim the deduction for charitable gifts?
Any gift to a charity, assuming the charity is a deductible gift recipient (DGR), the gist will be deductible to whoever’s name is on the receipt.
But beware if you buy any form of merchandise as part of the donation like biscuits, teddies, balls etc or buy something at an auction – then it’s generally not deductible.
Donations need to be a gift, not an return for something material. So if you buy a goat from a village it will not be deductible but if you make a donation to the village for them to buy the goat then the donation will be tax deductible.
Your Team
Any Christmas celebrations at your work premises on a working day are likely to be exempt from FBT. But keep the cost below $300 per team member to make sure the event is a minor benefit for FBT purposes and exempt from FBT. This includes meals, beverages, entertainment, etc.
If you like to spoil your team at Christmas then keep presents below $300 per person and ensure they are ‘one-off’ gifts. Remember they need to be ad hoc to be exempt from FBT.
The cost of Christmas Celebration are generally not tax deductible unless of course FBT does apply.
Your Clients
Unfortunately entertaining clients at Christmas is not tax deductible . So why not give a gift instead. A gifts is tax deductible as long it is given by the business with the expectation that the business will benefit and generate revenue.