Do You Owe Fringe Benefit Tax For Your Staff Christmas Party and Gifts?
December 3, 2018
Perhaps one of the most famous accountants in literature is Bob Crachitt of Charles Dicken’s ‘A Christmas Carol’. Ebenezer Scrooge is his boss, a miserly moneylender. He underpays Bob who can’t afford proper health care for the lovable little scamp Tiny Tim, let alone a wonderful Christmas feast.
No one wants to follow in the footsteps of Scrooge at this giving time of year. Because A) getting visited by three Christmas ghosts is scary and B) poor Tiny Tim! As a business owner now is the time to say thank you to your staff for all of the hard work they do throughout the year.
Before you start planning your Christmas party and/or gifts there are a few things you need to consider, such as Fringe Benefits Tax.
What Is Fringe Benefits Tax?
Fringe Benefits Tax (FBT) is tax employers pay on certain benefits they provide to their employees – including their employees’ family or other associates. The benefit may be in addition to, or part of, your employee’s salary or wages package.
Only certain businesses are required to pay FBT, so it is best to speak to a trusted accountant or financial advisor to check if it applies to you.
Planning Your Party
If the amount you spend per employee for your party is less than $300 per head it does not attract FBT. So without being an Ebenezer it is important to consider the total cost per person. FBT is an extra tax and most small businesses will avoid paying it.
Planning Your Christmas Gifts
When you provide Christmas gifts, you’ll need to consider a few different components. One is the amount you spend, the type of gift and who the gift is for. Then consider the type of gift. Items such as wine or hampers are treated differently to gifts like tickets to a movie or sporting event. It is also important to consider who your gift is for, there are different rules for employees and clients/suppliers.
The Things Money Can’t Buy
There is an extra benefit of not being a Scrooge. It is important to have a fun time during the holiday season. A kind gesture of a party of gift helps to keep employee morale and loyalty high, resulting in low turnover of staff.
If you have questions about your choice of gift or party for the holiday season, you can have a look at the ATO site or book a free consultation to learn the best option for your business.
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In today's fast-paced digital world, managing your finances effectively is more crucial than ever. For businesses leveraging digital technology, streamlined bookkeeping is not just a good practice—it's essential for sustained growth and success. Here are some top bookkeeping tips tailored for the digital age. Embrace Cloud-Based Accounting Software One of the most significant advancements in bookkeeping is the rise of cloud-based accounting software. Platforms like Xero, QuickBooks Online, and MYOB offer numerous benefits: ● Accessibility: Access your financial data anytime, anywhere, from any device with an internet connection. This is perfect for remote teams or business owners on the go. ● Real-time Updates: Get a live view of your financial health, allowing for quick and informed decision-making. ● Automation: Automate routine tasks such as invoicing, expense tracking, and bank reconciliations, saving you time and reducing errors. ● Integration: Seamlessly integrate with other digital tools you use, such as CRM systems, e-commerce platforms, and payment gateways. Digitise and Automate Expense Tracking Say goodbye to shoeboxes full of receipts. Digital tools make expense tracking effortless: ● Receipt Scanning Apps: Use apps like Receipt Bank or Expensify to capture receipt images on the go. These apps can extract key information and categorise expenses automatically. ● Direct Bank Feeds: Link your business bank accounts and credit cards to your accounting software to automatically import transactions. This reduces manual data entry and ensures accuracy. ● Categorise Consistently: Establish clear expense categories and apply them consistently to gain accurate insights into your spending patterns. Regular Bank Reconciliations Even with automation, regular bank reconciliations are vital. This process involves comparing your accounting records with your bank statements to ensure everything matches up. ● Catch Errors Early: Identify discrepancies or errors promptly, preventing them from escalating into larger issues. ● Prevent Fraud: Regular checks can help detect unauthorised transactions. ● Maintain Accuracy: Ensure your financial statements are accurate and reliable for tax purposes and financial reporting. Utilise Digital Invoicing and Payment Systems Streamline your accounts receivable with digital solutions: ● Electronic Invoicing: Send professional invoices directly from your accounting software via email. This is faster and more eco-friendly than traditional paper invoices. ● Online Payment Gateways: Offer clients various online payment options (e.g., credit card, PayPal, Stripe) to facilitate quicker payments and improve cash flow. ● Automated Reminders: Set up automated reminders for overdue invoices to reduce the time spent chasing payments. Implement Strong Cybersecurity Measures With all your financial data stored digitally, cybersecurity is paramount: ● Strong Passwords and Two-Factor Authentication (2FA): Protect your accounting software and other financial platforms with robust security measures. ● Regular Backups: Ensure your data is regularly backed up to prevent loss in case of a system failure or cyberattack. ● Educate Your Team: Train your employees on best practices for data security and how to recognise phishing attempts. Seek Professional Advice While digital tools empower you to handle much of your bookkeeping, there are times when professional guidance is invaluable. ● Tax Planning: A qualified accountant can help you navigate complex tax laws and optimise your tax strategy. ● Financial Analysis: Gain deeper insights into your financial performance and identify areas for improvement. ● Compliance: Ensure your business remains compliant with all relevant financial regulations. By integrating these bookkeeping tips into your digital technology framework, you'll not only save time and reduce stress but also gain a clearer, more accurate picture of your business's financial health, paving the way for sustained success. For more information or assistance, feel free to contact us at 360 Accountinsg Services via email at enquiries@360accountingservices.com.au
As a small business owner, managing your finances can be a complex task. While effective bookkeeping is essential for day-to-day operations, there are specific situations where seeking professional financial advice can provide significant benefits and help ensure your long-term success. Key Indicators It's Time to Consult an Advisor It's important to recognise when your financial situation warrants more than just accurate record-keeping. Here are some common scenarios that suggest it's time to reach out to a professional financial advisor: ● Significant Business Growth: When your business experiences rapid growth, your financial structure often needs to evolve to keep up. An advisor can help you navigate increased revenue, new investments, and scaling operations. ● Complex Tax Situations: If your business has diversified income streams, international operations, or other complex tax implications, a financial advisor specializing in tax planning can help you optimize your tax strategy and ensure compliance. ● Major Business Decisions: Contemplating a significant investment, expansion, acquisition, or sale of your business? These decisions have profound financial implications, and professional advice can help you assess risks and opportunities. ● Cash Flow Challenges: While bookkeeping tracks cash flow, an advisor can help identify underlying issues causing consistent cash flow problems and develop strategies to improve liquidity. ● Personal and Business Financial Blending: Small business owners often find their personal and business finances intertwined. An advisor can help separate these and create clear strategies for both. ● Retirement or Succession Planning: Planning for your eventual exit from the business, whether through retirement or selling, requires strategic financial foresight. An advisor can help create a robust succession plan. ● Unexpected Financial Changes: Market downturns, sudden operational changes, or unforeseen expenses can create financial uncertainty. A professional can help you navigate these challenges and adapt your financial strategy. ● Lack of Financial Knowledge: If you find yourself consistently unsure about financial terminology, investment strategies, or long-term financial planning, it's a clear sign that professional guidance would be beneficial. What a Financial Advisor Can Offer A financial advisor offers a range of services that go beyond the scope of traditional bookkeeping: ● Strategic Planning: Developing long-term financial goals and creating a roadmap to achieve them. ● Investment Guidance: Advising on suitable investment opportunities for your business's growth and stability. ● Risk Management: Identifying and mitigating financial risks that could impact your business. ● Tax Optimisation: Crafting strategies to minimize tax liabilities legally and effectively. ● Succession Planning: Preparing for the smooth transition of business ownership. ● Budgeting and Forecasting: Assisting with more advanced financial projections and budget development. Next Steps If you identify with any of the scenarios above, don't hesitate to seek professional financial advice. A consultation with a qualified advisor can provide clarity, peace of mind, and a stronger financial foundation for your business. For a personalised consultation, contact us at enquiries@360accountingservices.com.au
In today's fast-paced digital world, managing your finances effectively is more crucial than ever. For businesses leveraging digital technology, streamlined bookkeeping is not just a good practice—it's essential for sustained growth and success. Here are some top bookkeeping tips tailored for the digital age. Embrace Cloud-Based Accounting Software One of the most significant advancements in bookkeeping is the rise of cloud-based accounting software. Platforms like Xero, QuickBooks Online, and MYOB offer numerous benefits: ● Accessibility: Access your financial data anytime, anywhere, from any device with an internet connection. This is perfect for remote teams or business owners on the go. ● Real-time Updates: Get a live view of your financial health, allowing for quick and informed decision-making. ● Automation: Automate routine tasks such as invoicing, expense tracking, and bank reconciliations, saving you time and reducing errors. ● Integration: Seamlessly integrate with other digital tools you use, such as CRM systems, e-commerce platforms, and payment gateways. Digitise and Automate Expense Tracking Say goodbye to shoeboxes full of receipts. Digital tools make expense tracking effortless: ● Receipt Scanning Apps: Use apps like Receipt Bank or Expensify to capture receipt images on the go. These apps can extract key information and categorise expenses automatically. ● Direct Bank Feeds: Link your business bank accounts and credit cards to your accounting software to automatically import transactions. This reduces manual data entry and ensures accuracy. ● Categorise Consistently: Establish clear expense categories and apply them consistently to gain accurate insights into your spending patterns. Regular Bank Reconciliations Even with automation, regular bank reconciliations are vital. This process involves comparing your accounting records with your bank statements to ensure everything matches up. ● Catch Errors Early: Identify discrepancies or errors promptly, preventing them from escalating into larger issues. ● Prevent Fraud: Regular checks can help detect unauthorised transactions. ● Maintain Accuracy: Ensure your financial statements are accurate and reliable for tax purposes and financial reporting. Utilise Digital Invoicing and Payment Systems Streamline your accounts receivable with digital solutions: ● Electronic Invoicing: Send professional invoices directly from your accounting software via email. This is faster and more eco-friendly than traditional paper invoices. ● Online Payment Gateways: Offer clients various online payment options (e.g., credit card, PayPal, Stripe) to facilitate quicker payments and improve cash flow. ● Automated Reminders: Set up automated reminders for overdue invoices to reduce the time spent chasing payments. Implement Strong Cybersecurity Measures With all your financial data stored digitally, cybersecurity is paramount: ● Strong Passwords and Two-Factor Authentication (2FA): Protect your accounting software and other financial platforms with robust security measures. ● Regular Backups: Ensure your data is regularly backed up to prevent loss in case of a system failure or cyberattack. ● Educate Your Team: Train your employees on best practices for data security and how to recognise phishing attempts. Seek Professional Advice While digital tools empower you to handle much of your bookkeeping, there are times when professional guidance is invaluable. ● Tax Planning: A qualified accountant can help you navigate complex tax laws and optimise your tax strategy. ● Financial Analysis: Gain deeper insights into your financial performance and identify areas for improvement. ● Compliance: Ensure your business remains compliant with all relevant financial regulations. By integrating these bookkeeping tips into your digital technology framework, you'll not only save time and reduce stress but also gain a clearer, more accurate picture of your business's financial health, paving the way for sustained success. For more information or assistance, feel free to contact us at 360 Accountinsg Services via email at enquiries@360accountingservices.com.au
As a small business owner, managing your finances can be a complex task. While effective bookkeeping is essential for day-to-day operations, there are specific situations where seeking professional financial advice can provide significant benefits and help ensure your long-term success. Key Indicators It's Time to Consult an Advisor It's important to recognise when your financial situation warrants more than just accurate record-keeping. Here are some common scenarios that suggest it's time to reach out to a professional financial advisor: ● Significant Business Growth: When your business experiences rapid growth, your financial structure often needs to evolve to keep up. An advisor can help you navigate increased revenue, new investments, and scaling operations. ● Complex Tax Situations: If your business has diversified income streams, international operations, or other complex tax implications, a financial advisor specializing in tax planning can help you optimize your tax strategy and ensure compliance. ● Major Business Decisions: Contemplating a significant investment, expansion, acquisition, or sale of your business? These decisions have profound financial implications, and professional advice can help you assess risks and opportunities. ● Cash Flow Challenges: While bookkeeping tracks cash flow, an advisor can help identify underlying issues causing consistent cash flow problems and develop strategies to improve liquidity. ● Personal and Business Financial Blending: Small business owners often find their personal and business finances intertwined. An advisor can help separate these and create clear strategies for both. ● Retirement or Succession Planning: Planning for your eventual exit from the business, whether through retirement or selling, requires strategic financial foresight. An advisor can help create a robust succession plan. ● Unexpected Financial Changes: Market downturns, sudden operational changes, or unforeseen expenses can create financial uncertainty. A professional can help you navigate these challenges and adapt your financial strategy. ● Lack of Financial Knowledge: If you find yourself consistently unsure about financial terminology, investment strategies, or long-term financial planning, it's a clear sign that professional guidance would be beneficial. What a Financial Advisor Can Offer A financial advisor offers a range of services that go beyond the scope of traditional bookkeeping: ● Strategic Planning: Developing long-term financial goals and creating a roadmap to achieve them. ● Investment Guidance: Advising on suitable investment opportunities for your business's growth and stability. ● Risk Management: Identifying and mitigating financial risks that could impact your business. ● Tax Optimisation: Crafting strategies to minimize tax liabilities legally and effectively. ● Succession Planning: Preparing for the smooth transition of business ownership. ● Budgeting and Forecasting: Assisting with more advanced financial projections and budget development. Next Steps If you identify with any of the scenarios above, don't hesitate to seek professional financial advice. A consultation with a qualified advisor can provide clarity, peace of mind, and a stronger financial foundation for your business. For a personalised consultation, contact us at enquiries@360accountingservices.com.au
