We have been eagerly trying to finalise all your Income Tax Returns prior to closing for Christmas BUT the ATO website has now been down for 2 days. Despite promises that all would be fixed at lunch time today (Tuesday 13 December) nothing has happened as yet.
This is all out of our hands.
The ATO have also advised that as they will close over Christmas, refunds won't be processed until early next year. We have received refunds over the past few days so are unsure as to when this will stop.
Binging on Christmas expenses
It’s easy to spend too much at Christmas. If you are splurging on clients, to be a legitimate business expense and therefore deductible, the expense has to be related to how your business generates income. So, excessive expenses may draw the attention of the regulators and the deduction denied.
If you are hosting client functions, inviting them to lunch, or to your Christmas party, entertainment costs are not deductible.
For staff, if you really want to avoid tax on your work Christmas party then host it in the office on a work day - that way, it’s likely to be exempt from Fringe Benefits Tax (FBT) regardless of what you spend per person.
But, if you are hosting a work Christmas party outside of the office, keep expenses under $300 (GST incl.) per employee to stay under the FBT minor benefit exemption threshold. So, post Christmas party taxi travel expenses, the cost of the Christmas party itself (including meals, drinks and entertainment etc.,) will all be exempt from FBT as long as the cost is kept below $300 per employee. But, employers cannot then claim a deduction for the Christmas expenses or claim GST credits.
Christmas gifts for the team should also be kept to under $300 (GST incl.) to ensure they do not incur FBT. Employers can claim a deduction for ad hoc Christmas gifts as long as they do not relate to entertainment.
Post Christmas regrets
February is when a lot of businesses pay their Activity Statements. Avoid Christmas cashflow hangovers. Make sure you protect your position and stay on top of not just Christmas expenses but debtors, stock, and staffing costs.
With Christmas fast approaching, the office will close at 5pm on Thursday 22 December 2016 and re-open at 9am on Monday 9 January 2017. Dejan will be taking an extended break and not return until Monday 16 January 2017.
From all the team we wish you a very merry and safe Christmas.
Lodgment of Income Tax Returns
Did you know that by lodging through a tax agent, your income tax return is not due for lodgment until May 2017? The ATO ads seem to make everyone panic once October comes around. Please don't panic. There is no rush to have these done prior to 31 October, unless you have more than one year outstanding. Contact us if you have any questions about this.
November 2016 News
September 2016 News
August 2016 News
July 2016 News