2021 Christmas Parties and Gifts – Everything a business owner needs to know from the ATO!

Categories: ,

The highlight of the year for many employees is their End of Year Christmas Party. A time to let their hair down and enjoy a social event with their fellow team members and celebrate the year that was. Some may even be lucky enough to receive a lovely gift as a sign of appreciation for their hard work throughout the year. 

Unfortunately, as we approach the end of 2021 the Australian Taxation Office (ATO) has different ideas. The restrictions the ATO is imposing on employers is something every business owner needs to be aware of prior to making any plans or purchases for employees or associates.

So, although the ATO is not allowing businesses to claim a tax deduction or GST for celebration costs or generous employee gifts, the AWT Accountants Team is still very much looking forward to our 2021 End of Year/Christmas lunch at The Alcove at Joondalup Resort.

The below table outlines what our very own Christmas Grinch, the ATO, says NO to what is a tax deduction or what GST can be claimed. Spoiler alert – it doesn’t look good!  Boo You, Christmas Grinch!

Be mindful that you will need to familiarise yourself with Fringe Benefit Tax (FBT) implications and what the ATO advises are ‘Entertainment Benefits’.

You will note the ATO is still allowing gifts to be purchased for your Clients, Contractors and Suppliers (with exclusions).  We have listed our top 10 gift ideas for under $300 below:-

  1. Wine 
  2. Gourmet Gift Hamper
  3. Decanter Set
  4. Cocktail Making set
  5. Coffee or Tea Blends
  6. Coffee Table Book
  7. Indoor Plant
  8. Personalised Stationery
  9. Self Care Hamper
  10. Tech and Gadgets

For more information on how to better understand FBT and the most tax-effective way for your business to thank and celebrate your employees this year, click here to contact the team at AWT Accountants today.