Can I claim the cost of Christmas gifts through my business?
Christmas is a time for giving and as a business owner you may wish to give back to the people who keep your business going. Here are some tips on how you should treat gifts to your staff and customers in your accounts:
- Gifts to staff are treated differently to gifts to suppliers or customers.
- Gifts to staff that are valued at less than $300 are NOT tax deductible so you can NOT claim GST on them ( sorry ) .
- No FBT applies to employee gifts of this value.
- Gifts to employees worth over $300 may attract FBT ( so check with your accountant and enter them in a separate account category to make things easier)
- If you buy a gift for a client or supplier, you can only claim a tax deduction and claim the GST credit if the gift is not considered to be entertainment in nature.
- Wine, hampers, gift voucher, flowers etc are not considered to be entertainment so you can claim these.
- Tickets to events, meals out, Flights and holidays etc are considered to be entertainment and so you can NOT claim these as a deduction or claim the GST credit on these.
- If in doubt always check with your friendly tax accountant.