Christmas Business Expenses
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GRA Blogs
Articles by Anthony Strevens
It’s that time of year again and even for those who have been locked up for the last three months, the ability to get out and about for Christmas parties and lunches is back on the menu. But as a business owner, can you claim all of those Christmas expenses?
The answer is that the majority will fall under the “entertainment” expenditure banner and therefore will either be 50% deductible or 100% deductible.
Here are some common examples:
Christmas Party
Whether your party is on-site or off-site, expenses associated with your staff Christmas Party including the food, drink and all other related costs like bringing in the latest DJ and hiring bouncy castles will only be 50% deductible. This will also apply to lunches and dinners that you take colleagues out for.
Gifts to Staff
Gifts of food and drinks, including vouchers for suppliers of food and drinks (e.g. liquor shops and supermarkets) will only be 50% deductible.
Other gifts should be 100% deductible. However, if the gifts are over $300 in total for the October to December quarter, then fringe benefit tax (FBT) will be payable. This shouldn’t be a big problem if you are already registered for FBT and filing returns, but you are unlikely to want to register for FBT just for this purpose.
Christmas Bonuses
A bonus payment of money to staff should simply be treated as wages and declared in your PAYE return. So therefore it will be 100% deductible.
Gifts to Clients
Gifts to clients will be 100% deductible. However if the gifts are food or beverages then they will only be 50% deductible.
If in doubt about claiming Christmas expenses, get in touch with your Client Services Manager at GRA to clarify. Or if you are not already a client, request a meeting to see how we can help.
Merry Christmas!
Anthony Strevens
Business Advisory Director
© Gilligan Rowe & Associates LP
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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.
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This letter is to express my appreciation for the assistance and encouragement of both Anthony Lipscombe and particularly John Heaslip over the last financial year. The period since activating my trading trust has been one of considerable stress, as well as personal development, as I embarked on this as a relative business neophyte with virtually no awareness of the contemporary requirements of running a business, particularly the financial records aspect. During much of this period I have therefore felt considerable out of my depth. However I have been lucky enough to have had the benefit of the advice and support of John Heaslip in rationalizing what was a fairly chaotic set of records of the first year property trading. I am able to say that John in particular, has been unstinting in his attention to my needs and has done so in a manner which has never alluded to my extremely rudimentary grasp of managing a business, or even of being unable to set out a spread sheet properly. The result of the above guidance is that now, although my trading trust would still not be able to operate without the advice of GRA, I do least feel a sense of satisfaction that I have got to my present point without major disaster and that my property trust does now have some kind of firmer basis for any future activities - Name withheld by request
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