There is so much misinformation about what you can and can’t claim when it comes to entertainment expenses. There are so many variations depending on the nature of the expense and who is receiving them that there is no wonder it’s a confusing area for most. We’ve tried to break it down into simple terms to help you out.
The two tables below show where the ATO stands on entertainment expenses for employees and clients and which are eligible for FBT.
But firstly, what is FBT?
Fringe Benefits Tax (FBT) is a tax paid by employers for certain benefits they give to employees and their associates. If you provide fringe benefits as an employer, you need to prepare an FBT return and the current FBT rate is a whopping 47%! So in some cases it might make sense not to claim a tax deduction for the expense, so that you don’t encounter FBT. If in doubt, contact us in the office to discuss your specific circumstances.
Clients, contractors and suppliers
Deductions for Personal Super Contributions
If you have made personal superannuation contributions from your after-tax income in the 2019 financial year, you may be able to claim a deduction for these contributions in your tax return.
Before you can claim a deduction, you need to notify your super fund using a Notice of Intent to Claim form which can be downloaded from their website. Once completed send it to your super fund, who will send you an acknowledgement. The acknowledgement has to be received before we lodge your tax returns to claim the deduction.
These contributions will count towards your concessional contributions cap which is currently set at $25,000. So to decide if you want to include these personal contributions you will need to also consider your employer contributions and your income level (if you’re adjusted taxable income >$250,000 you may be eligible for Div 293 tax). Feel free to call the office to discuss your personal circumstances.
Land Tax Amnesty
Land tax is an annual tax levied at the end of the calendar year on all property you own that is above the land tax threshold. Your principal place of residence is exempt, but if the land value of all your other properties exceed $692,000 then you should be registered with Revenue NSW.
According to the government website “Revenue NSW is also offering a three-month amnesty period for landholders who may be unaware of their land tax liabilities to come forward and tell us about their landholdings without incurring any additional penalty on top of their existing liability”. During this period, more flexible payment options will be available.
As always, the team at Care Accounting are here to help if you have any questions.