BOX­ING DAY AC­COUNT­ING: WHAT CAN YOU CLAIM?

THOUGH THE FES­TIVE SEA­SON and its ex­cesses feel far be­hind us, it’s only now that many agen­cies are ac­count­ing for their hol­i­day ex­penses. Client Christ­mas party? Tick. Land­lord gifts? You know it. Com­pany Christ­mas party? That’s there too. How much can y

Elite Property Manager - - Property Management Mentor - Natalie Hast­ings

Rather than nurs­ing a sore head over your nec­es­sar­ily gen­er­ous sea­sonal ex­pen­di­ture, now’s the time to fo­cus on ac­count­ing for these costs to ben­e­fit your busi­ness – and gain­ing a bet­ter un­der­stand­ing of the tax im­pli­ca­tions of gift­ing and hos­pi­tal­ity. A lit­tle at­ten­tion to de­tail now will re­sult in a 2016–17 tax re­turn you’ll feel more than jolly about.

CLIENT GIFTS

They’re your clients, and you love ‘em – so you treated them to gifts over the hol­i­day sea­son. That makes good busi­ness sense and good tax sense, too. Gifts to clients are, broadly speak­ing, tax de­ductible, giv­ing rise to GST cred­its. If your gift will pro­mote your busi­ness and cre­ate good­will – lead­ing to fur­ther re­peat busi­ness or re­fer­ral cus­tom – you’re free to claim away. Note that client gifts should not be sub­ject to fringe ben­e­fits tax, and that you can­not claim de­duc­tions or GST cred­its if gifts re­late to en­ter­tain­ment.

TEAM GIFTS

Your team are worth cel­e­brat­ing with presents! Gift­ing, how­ever, can be com­plex in terms of tax. Should you give your team a gift worth less than $300, this cost would gen­er­ally be ex­empt from fringe ben­e­fits tax. Gifts in ex­cess of this amount are gen­er­ally sub­ject to fringe ben­e­fits tax in the hands of the em­ployer – re­gard­less of whether they’re given at a Christ­mas party or not. Not all is lost, how­ever; em­ploy­ers can of­ten claim de­duc­tions and GST cred­its for the cost of these gifts. The main ex­cep­tion is where a gift re­lates to en­ter­tain­ment (such as tick­ets to the ten­nis or the the­atre). En­ter­tain­ment gifts are con­sid­er­ably more com­plex to han­dle in terms of ac­count­ing, so con­sult with your agency ac­coun­tant for more de­tails on your cir­cum­stances.

Small gifts given to your team ir­reg­u­larly through­out the year, with a value of less than $300 in­clud­ing GST, are de­scribed as mi­nor ben­e­fits. These in­clude bot­tles of vino, ham­pers, pens and

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