Wednesday, 25 November 2015

Myths about Work Christmas Parties

  •       Your secret Santa gift is always funny
  •          It is a good idea to tell your boss how you feel after a few drinks
  •          Your work Christmas party is always tax deductible

Whatever you want to call it - Christmas, the holidays, the silly season or Festivus, it is fast approaching! So before you have a few drinks and get to the “feats of strength” and the “airing of grievances” we thought we’d share a few basics on the tax treatment of Christmas parties.

Hopefully this will keep more money in your pocket for festivities with less of it taken by the Christmas Grinch/ATO.

  •          Work Christmas Parties are only tax deductible to the extent that Fringe Benefits Tax (FBT) applies.
  •           With the FBT rate currently at 49% this can add a significant additional cost to your function!

So when does FBT not apply?
The costs (e.g. food and drink) of Christmas Parties are exempt from FBT if they are provided:
  •           on a working day, and
  •           on your business premises, and
  •           consumed by current employees

If the above doesn’t apply (e.g. if you have your Christmas party off-site) the cost may still be exempt from FBT as a minor benefit provided the cost is less than $300 per employee

What if spouses attend?
The costs of spouses attending the Christmas party (whether on premises or off) is not exempt from FBT unless it is a minor benefit at a value of less than $300.

What if clients attend?
The costs of entertaining clients are not subject to FBT and are not income tax deductible.

What about staff gifts?
Gifts that are less than $300 per an employee and not entertainment (e.g. hampers) are tax deductible and no FBT will apply!

Gifts that are entertainment (e.g. movie, sport or theatre tickets) are generally not tax deductible although FBT will not apply if the cost is less than $300.

Bottom Line
The tax treatment of Christmas Parties and staff gifts can be complicated! They are often not deductible (not that there’s anything wrong with that) and sometimes FBT can apply.  If you would like to know more, or get some advice as to the best way to structure your Christmas festivities for tax please contact myself or any of the helpful team at Vivid Chartered Accountants on 02 6171 6000.

The team at Vivid wish you all a happy Christmas and we hope you enjoy your Christmas Parties – regardless of the tax treatment! 

We will be putting our feet up over the Christmas break and our office will be closed from 12pm on Thursday the 24th of December and will re-open on Monday the 4th of January.  We will also be closed on the afternoon of Friday the 18th of December for our own Christmas party.

Monday, 9 November 2015

Xero - Beautiful accounting software for beautiful people (you)

Smart small business owners all over the world are rushing to make the switch from traditional accounting desktop software to Cloud Based Solutions. As accountants and business advisers we are loving this change and the potential it offers our clients!

So why are we so excited about what most people consider the world’s driest topic - accountancy software?

The answer: Innovation.

Xero, a cloud based accounting solution has not only changed the way you look after your financial records, but the way you connect with your customers, suppliers, and advisors. So there’s a lot to be excited about!

Gone are the days of:
  • sitting down for hours of data entry, as you or your bookkeeper, enter each and every receipt and bank statement line
  • managing your debtors as almost a full time job 
  • looking at old historical data to try work out why your cash flow was so bad

Xero allows you to keep track of your finances on a real time basis! This means you can log in anywhere, at any time, and know what your business’s financial position is, how it is performing, who owes you money, and when upcoming payments are due.

Doesn’t that sound great?!

Xero has decided the way of the future is to utilise cloud technology and an innovative approach to business and as a result have produced amazing software with hundreds of time saving features and efficiencies built in.

Xero removes time-consuming data entry by automatically downloading your Bank statements into Xero on a daily basis. Recurring transactions are memorised, and you can set up rules to take the boring and time consuming work out of bookkeeping.

Xero reduces the time it takes to create professional Quotes and Invoices, as well as allowing you to copy invoices and create recurring invoices, which can be emailed directly to your customers. No more invoices getting lost in the mail! Get paid easier with Invoice Reminders, which automatically prompt customers when an invoice is overdue.

Processing Payroll is a breeze in Xero! Staff have access to an Employee Portal where they can access their payslips and request leave. Auto Super in Xero allows you to pay Super with a click of a button, whilst being compliant with the ATO’s new SuperStream rules.

Track your Inventory, schedule upcoming Payments to manage cash flow, and take care of your Reporting requirements.

There are so many great features in Xero that it is really hard to find a favourite. From an accountant’s point of view, the ability to access the same, live file as our clients has been invaluable. Our advice is no longer based off past figures, but instead we can provide proactive real-time advice and services.

If you would like to more about Xero and how it could benefit your business, please contact our office.