Christmas & The ATO > What’s the deal?!

It’s that time of year again when the good cheer is flowing and the champagne bottles are popping!

As a business owner, you may be tempted to go a little overboard when it comes to celebrating your team at Christmas.

We are here to answer that all-important question:

Can I claim my Christmas Party as a tax deduction this year?

The short answer is, yes, but there are some rules. 
To make sure you’re not met with any surprises after the Christmas decorations come down, let’s break it all down for you.

The $300 per person rule

You may be able to claim your function as an expense if the event cost per staff member does not exceed $300, including GST, providing the event is held at your premises during business hours.

You can NOT claim your end-of-year function as a business expense if:

- Alcohol is served

- Staff are allowed to bring guests (spouse/children)

- It’s held at a venue other than your business premises

You may incur Fringe Benefits Tax (FBT) if your function:

- Is held at a restaurant/cafe or entertainment venue
(cinema, nightclub, sporting venue, etc).

- Serves alcohol, no matter what type of venue

But what about Christmas gifts?

The $300 rule also applies to end-of-year thank-you gifts to your team.

Providing the following gifts are under the value of $300, it’s likely you CAN claim them as a business expense:

• Food hampers

• Flowers

• Gift certificates

• Wine

• Beauty products

• Clothes

And other gifts which do not come under the banner of ‘entertainment’.

Gifts like movie or sporting tickets do come under the banner of ‘entertainment’, and cannot be classed as a business expense (and may incur FBT).

We know that rules around business expenses can be confusing which is why we are here to help! 

Reach out if you’d like some clarity on business expenses you can claim.

Happy holidays from The Kartel Solution team!