Tax Savings at Christmas Time!

Christmas is a time of excessive spending, be wise with your money and consider the tax savings that can be made by following a few small points. One can save money on tax alot easier then you would believe.

If you run a business, no matter what the size, follow the following step to minimise the tax man grinch this Christmas.

Are you: An employer who provides your staff with a Christmas Party?

At a Glance: With the holiday season fast approaching many employers are planning their Christmas Parties, which may have some Fringe Benefits Tax implications.

You should: Be aware of your FBT obligations when planning your Christmas Party.

1. Christmas parties generally constitute “entertainment benefits” and as such would usually attract Fringe Benefits Tax (FBT).
2. However, you may be able to avoid FBT if you plan your Christmas party in a tax effective manner.
3. The provision of a Christmas party to an employee may be considered a minor benefit and therefore exempt from FBT, provided that the cost of the party is less than $300 per employee.
4. The minor benefit exemption may also extend to an associate of an employee, and as such, provided the cost of the party for each associate is less than $300, there will be no FBT implications.
5. If you choose to have your Christmas party on a working day on your business premises, expenses such as food and drink for your employees will be exempt from FBT.
6. However, an employee’s associate will not be exempt from FBT in such circumstances, unless they satisfy the minor benefit exemption.
7. The provision of a gift to an employee may also be a minor benefit, and exempt where the cost is less than $300, regardless of whether it is provided at the Christmas party or not.

Related Posts

• Pre-Christmas Priorities

  Christmas time is often a time of spending and celebration. But amongst it all, we can lose sight of our financial goals. So here’s a couple of Pre-Christmas priorities.

• Countdown To Christmas: Last Minute Savings

  Christmas is less than a week away, so what kind of savings can we make in the days we have left? Read on for a couple of tips.

• How to budget after big Christmas spending

  It certainly was the season to be jolly. It’s interesting to look back on the savings measures I suggested before Christmas, and to see how easy it is to get caught up in spending money. The new year is often a time to replace the catchcry of frivolity with a mantra of frugality, to throw [...]

• Your guide to saving money this Christmas

  Christmas is only a few days away, that’s right – only a few days away! Now take a deep breath, try not to look at your credit card bill and start thinking about some last minute Christmas saving tips that can help you prepare your finances for 2010. Below we have listed some of the [...]