It’s that festive time of year again, a time for celebrating another big year. We all want to give to our staff and clients to show our appreciation for all the hard work and support they have done, however we can all sometimes go a little overboard.

Many taxpayers drift off when we mention FBT and meal entertainment as it can be a tricky area to really understand, but it is so important during this time off year to understand how you need to treat the transactions and not get caught out paying additional taxes to the tax man.

You will need to ask yourself the why, what, when and where the food or drink are being provided. It is likely to be meal entertainment if you are in a social situation, being provided with an elaborate meal, outside of the usual place of work or alcohol is provided during your meal.

Should the benefit provided be less than $300.00 (Incl GST), the minor benefits exemption may be utilised. To utilise the minor benefits exemption, you need to consider each individual benefit separately i.e. a meal, a nights accommodation and taxi travel would all be separate benefits to be reviewed. You will also need to consider the infrequency and irregularity of the benefits, the more frequent and regular the benefit provided, the less likely you will be able to utilise the minor benefits exemption. This goes for gift giving as well.

The below can be used as a guide to determine the treatment of your festive expenses: