Coming into this festive season, many people are planning their end of year parties and client gifts. Whilst it is the time for celebration, planning ahead may lead to some always welcome Fringe Benefits Tax (FBT) savings.

Here are our top tips to help minimise your FBT exposure this festive season.

What is FBT?

FBT generally applies where an employer provides a non-cash benefit to an employee other than by way of their regular salary or wage.

At first instance an end of year party could be considered such a benefit and FBT could more than double the cost of the celebrations. However, with effective planning, your Christmas party could be structured in such a way that could result in an FBT exemption particularly where the per head costs are kept below $300.

Our top tips for limiting your FBT exposure

• Use the actual method to value meal entertainment fringe benefits (contact your adviser to understand this method further).

• Consider non-meal entertainment fringe benefits such as venue hire, hiring of a band as these are a separate category of fringe benefit

• Keep the cost of the Christmas party to less than $300 per head (incl. GST)

• Check that gifts provided to staff are less than $300 in value (incl. GST).

• Provide non-entertainment gifts such as wine or chocolates to clients to ensure a tax deduction is available.

If you would like more information as to how effectively manage your end of year celebrations, please contact your local Findex tax adviser.