Many business owners wish to thank their employees for their assistance during the year, by way of providing a Christmas function to them. As business owners you need to be aware of the various implications when providing these.
For tax purposes you need to be aware of any possible FBT implications of any function you hold in respect of end of year celebrations. Keep in mind where you are holding the function, if the event is held on a working day on your business premises and consumed by current employees the event is exempt from FBT.
Consider the value of the benefit being provided, if the cost of the function is less than $300 per employee and certain conditions are met the function could be treated as a minor benefit and exempt from FBT.
Often employers like to purchase gifts to employees at Christmas time, the provision of these gifts may be a minor benefit that is an exempt benefit where the value of the gift is less than $300. If you provide the gift to your employees at the Christmas function, the benefits are deemed to be associated benefits. Each benefit needs to be considered separately to determine their value be less than $300. If both are less than $300 in value and other conditions of a minor benefit are met, they will both be exempt benefits.
As employers keep in mind your responsibilities when hosting work-related events, regardless of where the event is held you need to ensure you address and communicate your own and employees’ responsibilities.
As a work event, normal workplace policies apply as do behavioural standards and code of conduct. As per normal workplace behaviour any breaches of company policy could result in disciplinary action. Workplace Health & Safety management still applies at offsite work-related events so considering the health and safety of all attendees is important.
To get the best out of the end of year celebrations, consider the following:
- Prior to the event ensure that all employees are reminded that this is a work event and therefore workplace policies, behaviour and code of conduct applies
- Ensure there is a clear start and finish time
- If you are serving alcohol ensure that adequate food is served as well
- Post event transport, how will people get home safely
Taking time to ensure that everyone is aware of their responsibilities and expectations prior to the event, will assist in minimising any possible fallout from end of year celebrations.