Tax efficient gift giving
Tax effective gift giving might not be at the top of everyone’s mind but hey, we’re accountants and we can’t help it. So, for all those non-accountants, here are our top tips for giving to those you intend (and not the tax office):
Giving to your team
Christmas celebrations at your work on a working day are likely to be exempt from FBT.
Keep the cost of your celebrations per person below $300 to make sure the event is a minor benefit for FBT purposes and exempt from FBT (including meals, beverages, entertainment, etc.,).
Keep any Christmas presents below $300 per person and ensure they are ‘one-off’ gifts. They need to be ad hoc to be exempt from FBT.
You can’t deduct the cost of your Christmas celebrations for team members unless FBT applies.
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Dear Santa,
Thank you for the opportunity to provide advice on your Australian tax position. We are concerned by a number of areas of your operation that will no doubt come under scrutiny by the ATO. We note these below:
GST
Most goods imported into Australia with a value above $1,000 are subject to GST. With approximately 4,329,000 children in Australia on your list, averaging $40 per gift (depending on whether they have been naughty or nice), we estimate that you will be liable for GST in excess of $17,317,192. We need to discuss tax structuring urgently.
We are also concerned that you also may face other commercial issues from Australian retailers who will perceive your ‘gift’ giving as a hostile attempt to gain market share (please google recent comments by Gerry Harvey and GST).
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Avoid these tax minimisation mistakes in the end of year flurry
Q. We’re starting to think about the end of financial year and some tax planning to maximise our tax position. Are there any obvious things we should be looking at and are there any traps we need to watch out for? My partner is keen to get every possible tax deduction but I’m not sure how far we should go.
A. The end of financial year always causes a flurry of activity. The earlier you can plan this out the better the chance that you will not get caught making poor decisions. The three biggest mistakes are; spending simply for sake of the tax deduction, taking deductions that will cause you a cash flow problem and taking a lower value tax deduction this year only to pay the tax at a higher rate next year.
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Above all talk to your accountant. Every business is different and you need to take advice from someone who understands your current position.
Having said that, there are some good ‘housekeeping tips’ that almost every business should review. Here are 7 of them.
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Tax reform and you – what’s in, what’s out, and what’s still to come
The Government’s response to the Henry Review released at the beginning of this month was an anti-climax. The Government have released only the first phase of reforms and left the majority of the Henry Review recommendations untouched. This does not mean that we will not see any further reform; it’s just that there is no definitive timeframe for further announcements.
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