Businesses could be taxed for staff celebrations

With the festive holiday season just around the corner, the Australian Taxation Office (FBT) has urged businesses planning staff celebrations to check if they will be liable for fringe benefits tax (FBT).

 “Before you hire a restaurant or book an event, make sure you work out if the benefits you provide your employees are considered entertainment-related and if they’ll attract FBT,” it says.

 Whether you will need to pay this tax depends on:

 * the amount you spend on each employee

* when and where your celebration is held

* who attends (is it just employees or are partners, clients and suppliers also invited?)

* the value and type of gifts you provide.

 “It is important to get on top of how FBT works before you provide perks and extras. Otherwise, you may end up with an unexpected FBT liability.”

 For businesses that are providing entertainment-related fringe benefits, the ATO says you need to keep the right records to support this so you can calculate their taxable value.

 

#accountant #tax #staffparty