Entertainment Rules To Cover the Xmas Period

Once again Christmas has flown by and the indulging period is over. Now that most of us are back at work and GST time is looming again, it is always good to refresh the memory on what can and cannot be claimed for those entertainment expenses.

Once again Christmas has flown by and the indulging period is over. Now that most of us are back at work and GST time is looming again, it is always good to refresh the memory on what can and cannot be claimed for those entertainment expenses.

Not all entertainment expenses are 100% claimable for GST purposes but hopefully these points will be of use to guide you in the right direction:

• 100% claimable expenses
o Any morning and afternoon tea shouts for staff.
o If you have a retail shop and are providing samples to customers this is fully deductible.
o Entertainment that is provided to the general public.
o If you have a licensed premises that is providing a special offer (e.g. Happy hour at reduced prices, two-for-one meals, free drinks) all expenditure for this is fully deductible.

• 50% claimable expenses
o Providing drinks for staff or clients either on in the work place or at the pub.
o Those ever important staff Christmas parties, whether on or off the business premises are only 50% deductible.
o Where only 50% is claimable the adjustment for the non-claimable portion can be done in the GST return when the Income Tax return relating to that year is filed. i.e You claim all the GST up front and then do an add back when the tax return is filed. We will advise you each year of the total to add back.

If you are having any trouble with understanding what entertainment you can and cannot claim, please don’t hesitate to get in touch with us.

Staff