We have reached the end of another busy year for Davis & Co and are looking forward to a fabulous 2018 with the new team of four; myself, Lisa-Jean, Don and Kelly.
Our office will be closing down for the holiday period from December 22nd and we will be returning on 15th January 2018.
January Income Tax and GST payments due
Before we head off for Christmas we will be sending out the payment letters (for those who are provisional tax payers) that are due on the 15th January.
We will also be advising those of you who we file GST for the amount payable on the 15th January.
Preparing for the Christmas Break
Throwing a staff party can be a great way to see out the year and celebrate successes, but there are tax considerations to think about.
50% of your Christmas party expenses may be claimed in your GST and income tax returns if the expenses relate to your business. Expenses can include:
- food and drink
- venue hire
*Note, entertainment outside of New Zealand is 100% deductible, as long as they relate to your business.
Business gifts and entertainment
Generally, you can claim the costs of gifts as a business expense, eg. Non-perishable hampers or gift vouchers. However, food and drinks or other consumable items are only 50% deductible.
A meal out provided by the business is an entertainment expense and you can claim 50% as a business expense.
If you are thinking of giving your staff a cash bonus this Christmas, make sure to use the lump sum bonus tax rate when including this in your PAYE return.
Alternatively, paying your staff in vouchers and keeping below the Fringe Benefit Tax Threshold can be a great reward resulting in tax free perks for your team, and a 100% deductible expense to your business. The thresholds to keep below are as follows:
- $300 per employee per Quarter, or
- $22,500 total for the whole team per year, or
- $1,200 total per employee per year
Giving to charity
You can deduct 100% of the cost of entertainment you provide to members of the public for charitable purposes. For example, if your business donates food to a party at a hospital.
Give us a call if you require further information.
Paying Staff over the Holidays
When there is a public holiday on a day your employee usually works, they’re entitled to a paid day off. You can only require employees to work a public holiday if it is written in their employment agreements. Also, if they agree to work, you must:
- pay them at least time and a half
- give them another paid day off later – an alternative holiday or day in lieu
We would like to take this opportunity to thank our wonderful clients for your loyalty and support this year.
We wish you all a safe and Merry Christmas and look forward to seeing you all in the New Year!