Are gifts to your employees, clients, and suppliers claimable as a business expense?

Gifts may be classified as “entertainment” and therefore not claimable or subject to Fringe Benefits Tax (FBT).

For gifts such as wine, food, hampers, vouchers, etc., these are not considered to be entertainment.

If the gift is a minor benefit (i.e., less than $300 value), then the gift is not tax deductible, and therefore GST is not claimable for gifts to employees and their family members, clients, and suppliers. No FBT applies to gifts of less than $300.

For gifts over $300, FBT may apply for employees and their family members, but FBT does not apply to clients or suppliers.

Gifts such as a holiday, membership to a club, or tickets to a theatre, sporting or musical event are entertainment.

For minor benefits, as above, the gift is not tax deductible and no FBT applies. Also, for clients and suppliers, the entertainment gift is not tax deductible, and no FBT applies. For employees this is not a minor benefit, the gift is tax deductible, but it is also subject to FBT.

Giving your clients a gift at Christmas is a personal choice that you as the business owner can make. Be aware that some clients may not be allowed to accept gifts due to their business’s Code of Conduct (e.g., government workers).

We remind you that the topic of entertainment, tax deductibility and fringe benefits tax is complex and not always straight forward.

ATO LODGEMENT DATES

These dates are from the ATO website and do not consider possible extensions.

The business is responsible for ensuring that the necessary information is with us in time.

BAS/IAS Monthly Lodgement – November Activity Statement:  21st December 2020 final date for lodgement and payment.

BAS/IAS Monthly Lodgement – December Activity Statement:  21st January 2021 final date for lodgement and payment.

2nd Quarter of FY 2021: BAS Lodgement – December Quarter 2020 (including PAYGI) 28th February 2021 final date for lodgement & payment.

3rd Quarter of FY 2021: BAS Lodgement – March Quarter 2021 (including PAYGI) 28th March 2021 final date for lodgement & payment

When a due date falls on a Saturday, Sunday, or Public Holiday, you can lodge or pay on the next business day.

Due date for Super Guarantee Contributions, for:
2nd Quarter of FY 2021, October to December 2020 – contributions must be in the fund by 28th January 2021.

Late payments of superannuation are not tax deductible.

(Source:  ICB Newsletter Volume 12 Issue 6)