You are Scrooged! ATO to tax CHRISTMAS by forcing bosses for free drinks at office parties
- Companies that organize Christmas parties are liable for the Fringe Benefits Tax
- They are taxed on expenses such as food, drinks and travel, or non-salary benefits
- Employers pay a supplement if the entertainment costs exceed $ 300 per person
- Tax expert has revealed that taxis and hotel stays can surpass that
The tax authorities have waged war against Christmas.
Employers have been warned that they can be taxed if they organize parties for their staff during the festive season.
The Australian tax office said that free food, alcohol, hotel accommodation and travel would be taxed if the entertainment exceeded a certain amount.
Some non-profit organizations such as charities are exempt from paying the Fringe Benefits Tax, where employers are taxed if they offer their staff benefits rather than wages.
Other companies are not, which means that they are liable for spending at the end of the year.
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Australian companies that organize Christmas parties to reward their employees can be taxed on the free food and drink that they offer (stock image)
Mark Chapman, tax adviser at H&R Block, told Daily Mail Australia that companies were confronted with a Fringe Benefits Tax bill when the entertainment they offered cost more than $ 300 for each individual.
& # 39; There is no tax unless the costs are higher than that amount per employee and the same applies to staff partners & he said.
& # 39; Companies will usually exceed that amount if they provide taxis for the event or accommodation. & # 39;
He added that the three-digit threshold was generous and that most H&R Block customers fell below that number.
& # 39; Once you are at large companies such as banks, it may be different – for most companies we are talking about a local pub or hotel, & # 39; he said.
H&R Block & # 39; s tax communication director Mark Chapman explained that spending, including food and drink, accommodation and travel to the party location, could push companies above the $ 300 threshold – making them liable for the Fringe Benefits Tax (stock image) )
The ATO has issued a notification to remind employers of their obligations with regard to secondary employment conditions.
& # 39; It's that time of year where you might plan to reward your employees with gifts or a Christmas party for their hard work & # 39 ;, said it in a recent website update.
The tax office said that some non-profit (NFP) groups might be liable.
& # 39; If you are involved in the administration of the extra-legal tax for your NFP, think carefully if you intend to give gifts to your employees, & # 39; it said.
Non-profit groups such as hospitals are faced with the Fringe Benefits Tax for their Christmas parties if they were provided under a salary package arrangement.
Mr. Chapman said that charities were largely exempt from this tax because their staff generally had lower salaries.
& # 39; Often non-profit employers give them access to certain benefits – which makes the government FBT-free & # 39 ;, he said.
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