Accounting for Small Business

The newest member to our team is Belinda. She has come on board as our Client Services Administrator and according to Keith “she’s responsible for client happiness”. That’s a big call, but her other tasks include touching base with clients and keeping the office running smoothly.

Earlier in the year our team grew with the addition of “The Brooke” (but you can call her Brooke). She does a superb job in her role of bookkeeper and is also our training provider for Xero and MYOB. Nothing sits idle with Brooke until everything is done and perfectly balanced!

To save the rest of us from feeling completely left out there’s the old-timer accountants Keith and Fritha, and Andrew who answers some of your calls and assists with online marketing.

A non-entertainment gift (such as a Christmas hamper or take-home bottle of wine) to an employee, providing the gift is under $300, is tax deductible, GST claimable and there is no Fringe Benefits Tax (FBT) payable as this is considered a “minor benefit”. If the gift is $300 or more in value then Fringe Benefits Tax has to be paid. We therefore recommend that if you’re giving gifts that you keep each gift under $300 to avoid having to pay FBT.

If the gift is considered “entertainment” and worth $300 or more then FBT is payable and it is tax deductible. Entertainment is things such as theatre, sport, movie, venue or airline tickets. To avoid having to pay FBT it’s best to give non-entertainment gifts under $300 in value. However, please note that even if the entertainment gift is under $300, although you don’t need to pay FBT on the gift, it is also not available as a tax deduction.

If you’re holding a staff party this year (employees and partners only), it depends on where it’s held, the cost per head, and whether alcohol is involved. Unfortunately these are usually not tax deductible.

If you hold a party at your premises during office hours and no alcohol is involved then the cost is usually tax deductible and no FBT is payable (providing it costs less than $300 per person).

If you hold a party externally it is considered “entertainment” and is therefore not a tax deduction, and FBT is payable if it goes over $300 per person. Again, if you’re holding a party it’s best to keep your costs under $300 per person to avoid paying FBT.

Unfortunately it’s not very straight-forward! If you’re unsure about the tax deductibility or FBT on your intended gift/s or party please give us a call on (08) 9226 0332.