Festive Season Business Update
Holiday Business Closure
Our office will be closed from Friday 20 December and reopening Monday 6 January 2025.
The team at Hunter McLeod wish you and your families a very Merry Christmas and a prosperous New Year.
Entertainment and Christmas Party Expenses
During this holiday season you might be planning to claim entertainment and Christmas party expenses. It’s essential to understand which costs are deductible under entertainment expense rules, as some claims may be limited to 50%.
Examples of Entertainment expenses limited to a 50% deduction:
Food & Drink: Meals and beverages for staff or clients at a restaurant or catered within the office (excluding light refreshments like tea or coffee, typically categorised as staff expenses).
Event Costs: Venue hire, catering, and beverages for the party.
Travel: Transportation to and from the event.
Important Reminder: When reconciling entertainment expenses in Xero, provide a detailed narration and upload relevant invoices/receipts behind the payments.
Please see the links below for more information and examples on entertainment expenses.
Christmas Gift Cards and Tax Implications
As the holiday season approaches, businesses often consider giving gift cards to staff as Christmas gifts. The Inland Revenue Department has issued guidance on the tax treatment of such gifts:
Gift Card Tax Treatment:
Open-loop Cards (usable anywhere, like Preezy cards):
Treated as employment income to employees and shareholder employees.
PAYE tax must be withheld and reported.
Closed-loop Cards (store-specific, like Mitre 10 vouchers):
Considered a fringe benefit if given to employees.
FBT may apply based on the card’s value, subject the following FBT Exemptions:
Individual Limit: Gift cards and other fringe benefits must not exceed $300 per quarter or $1,200 per year per employee.
Company Limit: Total benefits provided to all employees must stay under $22,500 per year.
What Employers Should Do:
Report Correctly: Ensure PAYE or FBT obligations are met based on the card type and value.
Keep Records: Maintain clear documentation and upload relevant invoices/receipts behind the payments in Xero.
Upcoming Taxation Due Dates
15/1/2025 - Second 2025 provisional tax instalment (for most March balance date taxpayers)
15/1/2025 – November 2024 GST
20/1/2025 – December 2024 PAYE
28/1/2025 – December 2024 GST (for even monthly filers)
You will have recently received an email from us with details of any 2025 provisional tax due.
Please contact us if you have any questions about these payments.
Inland Revenue Holiday Office Hours
The Inland Revenue Department’s offices will close from 2pm Tuesday 24 December 2024 and will reopen Monday 6 January 2025. Over this period, you can still access myIR and IRD website at any time.
IRD Contact Numbers:
Self-service: 0800 257 777
General Enquires & Tax - Personal: 0800 775 247
General Enquires & Tax - Business: 0800 377 774
For additional details regarding IRD's contact information, please click here.