Leenane Templeton – Newcastle Business Accountants, Business Advisors & Financial Planners

Tag: holiday season

  • FBT, The Holiday Season & Your Employees

    FBT, The Holiday Season & Your Employees

    At the end of the year, you may be looking for extrinsic ways to thank your hardworking employees or faithful customers/clients.

    A work Christmas/end-of-year party may be a method employed by many businesses to demonstrate their gratitude towards staff, but the expense can be a deciding factor.

    Christmas/holiday parties are regarded as “entertainment” expenditures, which means they are not tax-deductible. The employer may have to pay FBT if the party costs $300 or more per person.

    It may also be that an end-of-year party might not be feasible for your business this year.
    Instead, it may be a better idea to thank your staff by giving certain items known as “non-entertainment” gifts. These non-entertainment gifts must cost less than $299.99 but are fully tax-deductible and carry no FBT.

    Non-entertainment gifts are usually exempt from FBT when the total cost of the gift is less than $299.99 (inclusive of GST). An employer can also claim tax deductions and GST credits for every non-entertainment gift to staff members.

    These gifts could include beauty or skincare products, flowers, wine, gift vouchers or hampers.

    If you provide a similar gift to the spouse/partner of an employee, the FBT exemption will also be valid. This can be a nice way to say thank you to the hard-working members of your staff while promoting a positive work culture.

    Providing your employees with gifts considered to be “non-entertainment gifts” but costing $300 or more (including GST) is less tax effective. Even though the gift giver can still claim a tax deduction and GST credit, FBT must be paid at 49%.

    You can still give staff members entertainment gifts as a way of saying thank you, though this is a less beneficial and tax-favourable option from an employer’s point of view.

    Examples of entertainment gifts include tickets to a play, sports event, musical, theatre or even providing a holiday.

    These gifts may not be FBT payable if they cost less than $299.99 (including GST) or claimable for a tax deduction or GST credit. However, if they cost more than $300 (including GST), an employer can claim a tax deduction and GST credit, but FBT is payable at 49%.

    Some fringe benefits (such as these gifts) may need to be included in payment summaries. When the value of certain fringe benefits amounts to more than $2,000 in an FBT year, it is your responsibility to record that amount in your payment summary.

    Want to know more about possible FBT exemptions that might apply to gifts you give to your employees this holiday season? Speak with us about how you can make this work for your situation.

    Chat with your accountant at LT

    Disclaimer:

    The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.


  • Tap Into The Holiday Season

    The holiday season provides the perfect opportunity to connect with customers and leverage off the seasonal shopping period.

    For many businesses, the upcoming Christmas season presents a peak in sales. Businesses that fail to maximise the holiday shopping season can miss out on a huge revenue opportunity and risk losing customers to competition.

    It pays to adjust your marketing based on seasonal sales opportunities. A marketing campaign that capitalises on the upcoming season provides businesses with the opportunity to position themselves as an adaptive and quick-to-react business.

    When crafting your holiday marketing campaign, it is not a good idea to leave planning and execution to the last minute. Here are five ways to boost sales and awareness this holiday season:

    Pick the right opportunities
    Ensure your marketing campaign meets the needs of your target market. Understanding your target market and their purchasing behaviour will help to hone into the festivities that may appeal to them and allows you to design your marketing campaign based around their wants and needs. Advertise ahead of the holidays

    Advertise ahead of the holidays
    Consider offering special discounts, increasing your availability for appointments (if you are a service based business), and introducing early bird offers to attract customers who like to shop ahead. Promoting your holiday season sale early helps to prime customers to choose your business as a default shopping destination before your competitors get a chance.

    Integrate with social media
    Successful holiday season campaigns integrate social media to increase reach and engagement. A strong social media strategy will help brands increase their social subscribers while encouraging customers to purchase. Consider enticing customers to subscribe with special offers such as free shipping or percentage discounts.

    Reuse, recycle
    As marketing efforts can be relatively expensive, consider reusing past marketing campaigns that were successful. Past campaigns may be recycled if they are still relevant or only need a few minor amendments. When developing a seasonal marketing campaign avoid time-specific references so the content can be used again.

    Include a call-to-action
    Seasonal campaigns will often have a deadline due to the nature of the campaign and therefore require a call-to-action. Encourage customers to contact your business via email, telephone or social media in your campaign and include deadlines for any special offers to create a sense of urgency. If uptake on promotions is not as expected you may extend offers for additional time.