We have had a few queries about this so just a reminder for you.
Don’t let the ATO crash your party! We’re all about having fun here at APL but we are also accountants therefore ‘rule followers’ – even when we party!
The ATO have some grinchy rules in place to make sure they put a damper on things.
Here is a summary:
The gifting process must be ‘irregular and infrequent’ (much like Strudel and his weeing in the house).
There is also a limit of less than $300. Anything $300 and over will incur a fringe benefits tax obligation.
Any gift under $300 will not incur fringe benefits – but is it a deductible expense? It is only deductible if it is not classed as entertainment. For example:
1. You buy your staff member and their pet (of course) a bag of treats worth $100 (it’s a big bag). This is a deductible expense and no fringe benefits is triggered.
2. You take your team out to a (pet friendly) restaurant and the meal costs $200 per head. This does not trigger fringe benefits tax but is not a deduction either because meals out are classed as entertainment (regardless of how tame the gathering is – it’s still entertainment).
3. You buy gifts worth over $300 for each staff member. This is like taking your dog to a no dog beach. Of course it’s possible to do, a ton of fun, your dog will love you and you will probably get away with it 80% of the time, but this would trigger fringe benefits tax, and you would be hit with a penalty and a ton of paperwork that no one wants to take care of.
With these 3 scenarios in mind – party as you wish!
For more information visit: https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/In-detail/FBT-and-Christmas-parties/