Giving gifts to clients (think about the tax)
- Team TvA
- Nov 18, 2024
- 1 min read
The season of giving is on us. While the fun part is thinking about parties and presents, take a moment to remind yourself about the tax rules.
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If your Christmas giving includes gifts to clients, remember that some gifts will be fully deductible while others will be only 50% deductible.
The rule of thumb with gifts is that if they consist of food or drink, you can only claim 50% of the expense as a tax deduction.
If you are giving out gift baskets or hampers and some of the contents are food or drink, but not all, the food or drink items are 50% deductible, but the other gift items are 100% deductible. When you come to claim the tax deduction, you will need to apportion the expense between the 100% deductible items and the 50% deductible items. And you will need to make a GST adjustment for expenses which are 50% deductible.
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Examples of gifts which are 50% deductible include:
Bottle of wine or six pack of beer
Meal voucher
Basket of gourmet food
Box of chocolates/biscuits
Christmas ham
Examples of gifts which are 100% deductible include:
Calendars
Book or gift vouchers
Tickets to a rugby game (but not corporate box entertaining)
Movie tickets
Presents (but not food or drink)
Call us if youād like to check the tax treatment of your plans for this seasonās gift-giving.
The article highlights an important aspect of holiday giving and its implications on tax deductions. It's crucial to understand that gifts can fall into two categories; knowing the distinctions between what is fully tax-deductible and what is only partially deductible can significantly affect your finances. Overlooking the details could lead to unexpected issues when claiming deductions, especially with items like food and drink https://bizzo.geek.nz/ Bizzo will benefit from a careful examination of these rules to avoid potential pitfalls in tax filings during this festive season.
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