Christmas expenses you can claim for
Gifting clients and staff a little something at Christmas time is always well received, however, it sure can add up! Here are the ins and outs of what you can claim back when it comes to Christmas gifts,
Gifts for Staff
Staff gifts are subject to Fringe Benefit Tax (FBT) if over the threshold of $300 per quarter per employee. As a general rule, if under the FBT threshold you can claim half of the costs of staff gifts that are food, drink, or entertainment and generally 100% of the costs of other staff gifts.
Gifting cash or vouchers that can be redeemable for cash will be treated as additional remuneration for the employee and subject to PAYE. However, if you are wanting to let your staff choose their gift you could give them cash to purchase something and have them give you the receipt for this purchase, along with any leftover change as this would bypass the ruling around PAYE. Prezzy cards are not considered cash so also fall outside the PAYE rules.
Gifts for Clients
The same rules apply with business gifts to clients, as do gifts to staff. Generally, a full deduction is allowed as long as the gift does not contain food, drink or entertainment (e.g a hamper). If you do give a gift that includes food, drink or entertainment then half of the costs can be claimed.
As a general rule, the following table applies
|Gift||What can you claim|
|Contains food, drink or entertainment||50%|
|DOESN'T contain food, drink or entertainment||Generally, 100%|
Are you aware there has been an extension to the Provisional Tax threshold?
Provisional tax allows you to pay your income tax in instalments rather than a lump sum. Due to Covid-19, the IRD has increased the provisional tax threshold from $2,500 to $5,000. This means any current provisional taxpayers who have provisional tax payments under the $5,000 have until 7 February (or 7 April if you have a tax agent like RightWay) 2022 to pay their tax bill for the 2021 financial year.
This extension to the provisional tax threshold will allow smaller taxpayers to retain their cash for longer.
Key tax dates over the 2021/2022 Christmas period:
|28 November 2021||GST returns and payments are due for the period ending 31 October|
|15 January 2022||
|28 January 2022||GST returns and payments are due for the period ending 31 December|
Have you let your clients know you’re closing?
Communicating closures to your customers is vital to avoid their disappointment in your business. Just imagine how frustrated and let down they would feel after driving across town to devour one of your famous treats, pick up a birthday present or collect a desperately needed item only to discover you are not open… even though Google says you are!
A dissatisfied customer will tell between 9 to 15 people about their negative experience 😣
There are so many ways to provide timely information on service hours to avoid disappointing your clientele, such as:
- Updating your ‘Google My Business' listing to reflect close down periods
Keeping your Google business listing as up-to-date as possible is vital to avoid disappointing your customer. Even if the close down period is only one day, such as for a public holiday, this information should still be shown on your Google My Business account. While a customer may still be slightly disappointed that they are unable to utalise your services, knowing that prior to arriving at your business will go a long way to avoiding extreme levels of frustration.
- Updating your social media messenger services to have an automatic reply
It is very common for customers to request information about businesses via social media messenger services. Therefore, if you are having a close down period it is important to set an out-of-office on your social media messenger service. As customers expect responses on social media to be FAST, having an automated response would be the best way to provide clarity over close downs.
- Emailing your customer database to notify them
Informing your customers ahead of time of upcoming close down periods allows your customers to plan ahead and provides an opportunity to not only mitigate potential disappointment but also to show the value you place on their time. This is especially important if your service requires lead time for delivery of the service such as a printing studio.
- Informative email footers
Having an email footer that can be loaded well ahead of time showing upcoming close down dates is extremely important if you have an extended close down – such as over the Christmas/Summer break. This way clients can plan ahead and mitigate any possible issues prior to their arising.
- Updating your phone message.
Keep your phone message as up-to-date as possible, including information such as, upcoming close down periods or, if already closed, include the following: when you closed, when you will reopen, if the phone messages are being cleared, who to contact in an emergency situation, and anything else you think your clients should know. All this information provides your customer with clarity on when they can expect a response or how to proceed.
- Requesting all staff update their out of office messages
Ensure you provide a step-by-step ‘how to’ document within your request so that this process is simple and will be followed correctly. A follow-up request would also be advantageous to ensure compliance.
After the year we’ve all had a Christmas function would be a great way to connect with your staff!
As an employer, you will need to oversee the safety of your staff during and after a Christmas event. With this in mind here are a few HR tips to assist in making your event one to remember!
- Ensure you have enough food and non-alcoholic beverages available to keep everyone hydrated and to reduce intoxication.
- If alcohol will be involved ensure you have a sober person/s in the group to keep an eye on everyone and dedicated sober drivers or another form of transportation organised.
- Be clear on expectations around behaviour and set guidelines around what you consider inappropriate.
- If your organisation has a Drug and Alcohol Policy in place, ensure any events adhere to prescribed recommendations in this policy.
- If staff usually wear a uniform it would be a good idea to request that staff wear alternative clothing for the function – there’s nothing worse than customers or potential customers seeing your staff having a little too much fun while wearing your branded uniform.
- Provide options for activities and allow the team to choose what they would like to do. With varying interests, fitness levels and food intolerances to consider it is always a good idea to provide options and varying activities so that there will be something enjoyable for everyone.
Paying staff over the 2021/2022 Christmas break
Public holidays, mondayisations and varying staff entitlements can make payroll over the Christmas period quite a handful! Check out our blog Navigating Annual Holidays and Closedown Periods for further information, including dates, to help minimise complications.
Give yourself a break!
2021 has been extremely tough for most businesses! Mitigating lockdowns, dealing with anxious staff or staff shortages and working from home has been very challenging to say the least. Not to mention that for many working parents all of this had to be done while taking on the role of teacher and counsellor to their children.
The level of uncertainty New Zealanders have had to deal with in 2021 is unprecedented and for many has been a strain on our mental health! With this in mind, taking time out to give yourself a break is more important than ever!
Take time out to relax, reset and just ‘be’
Taking time out allows us to breathe, to rejuvenate, to re-energise, and to gain perspective.
Taking a break or relaxing looks different for everyone and could include activities such as spending time with family, reading a book, taking a nap, going for a walk, baking or being creative.
Potentially this simply isn’t possible if the Christmas break is your busy period, however in this instance we would suggest planning a break for as soon as is feasibly possible.
Actively celebrating the positive parts of our lives provides many with a refreshed outlook and can be a great way to improve both mood and mindset. Sometimes in the humdrum of our busy lives we forget to take time to smell the roses but when we do, we feel a heck of a lot better!
Don’t hesitate to reach out for professional help if you think you need it. Visit the Ministry of Health’s website for a list of resources COVID-19: Mental health and wellbeing resources | Ministry of Health NZ
If you would like further assistance with your HR, Accounts or Bookkeeping needs, or would like to speak to one of our Business Partners to get your business set up for success please get in touch