Festive Season Tax Tips for Business Owners
The festive season is a time to celebrate your team’s hard work — but it can also bring a few tax traps. Whether you’re hosting a party, giving gifts, or making donations, here’s what you need to know to keep things simple (and ATO-approved).
Staff Parties: What’s Taxable and What’s Not
On-Premises Events
If you’re hosting a festive gathering at your business premises during a normal workday for current employees, the event is generally exempt from Fringe Benefits Tax (FBT).
Offsite Events
If your celebration is held offsite — say, at a restaurant or event space — the event may still be FBT-exempt if the total cost is under $300 per employee, thanks to the minor benefits exemption.
Tip: Client entertainment costs are not tax-deductible, and FBT doesn’t apply since clients aren’t employees.
Staff Gifts: What You Can (and Can’t) Claim
Non-Cash Gifts
Gifts such as hampers, wine, or vouchers valued at $299 or less per employee are generally FBT-free under the minor benefits rule.
Cash Bonuses
Cash gifts or bonuses are treated as ordinary wages, meaning they’re subject to PAYG withholding and superannuation.
Tax Deductibility
Event costs are only tax-deductible when FBT applies. If no FBT is payable, the expense isn’t deductible.
Charitable Giving: Feel Good and Claim It
If your business donates to a registered Deductible Gift Recipient (DGR), you can claim a tax deduction for the donation. Just make sure you keep clear records and confirm the organisation’s DGR status before donating.
Trust Distributions: ATO Tightens Its Grip for 2025–26
The ATO is turning up the heat on trust distribution arrangements — particularly under Section 100A, which deals with “reimbursement agreements.”
In short, the ATO now expects trustees to provide clear evidence that adult beneficiaries actually received or benefited from their trust income. Paper-only distributions won’t cut it.
Key Steps to Stay Compliant
Use a Dedicated Trust Bank Account
Keep all trust income in a separate account. Mixing it with personal or business funds can raise red flags.
Provide Evidence of Beneficiary Payments
When distributing to adult children, you’ll need to show that:
Funds were paid to their account, or
Used for identifiable expenses (e.g., rent, study, living costs), and
The beneficiary knew about and consented to the arrangement.
Maintain Detailed Records
Keep trustee resolutions, bank statements, receipts, and notes explaining how funds benefited each beneficiary. Lack of evidence is one of the biggest ATO triggers.
Avoid Leaving Funds in Parents’ or Business Accounts
If an adult child’s entitlement stays in a parent’s account, the ATO may treat it as a reimbursement arrangement — which can result in trustee tax at 45% plus penalties and interest.
Plan Distributions Before 30 June 2026
Choose beneficiaries carefully, document everything clearly, and make sure payments are traceable and defensible.
If you distribute income to adult children (or plan to), contact us before 30 June 2026. We’ll make sure your trust remains compliant, effective, and audit-ready.
Payday Super: SBSCH Is Closing — Here’s What It Means
As part of the Payday Super reforms, the ATO Small Business Superannuation Clearing House (SBSCH) will permanently close on 1 July 2026.
From 1 October 2025, no new businesses will be able to register for it — and existing users must transition to another super payment option before 30 June 2026.
What’s Changing
From 2026, employers will need to pay super at the same time as wages, with contributions reaching employee funds within seven business days.
Software providers like Xero, MYOB, and QuickBooks are already preparing updates to automate these new requirements.
How to Prepare
Start reviewing your payroll setup now and explore:
Integrated super payment options within your accounting software
Commercial clearing houses
Super fund payment services
Early preparation means fewer headaches and no last-minute scrambles.
Learn more at the ATO website
Key ATO Dates: December – February
Between holidays, celebrations, and slower cashflow, it’s easy for key deadlines to slip through the cracks. Here are the ones to keep on your radar:
December
21 Dec 2025 – Lodge & pay November 2025 monthly BAS or IAS
January
21 Jan 2026 – Lodge & pay December 2025 monthly BAS
28 Jan 2026 – Make Super Guarantee (SG) contributions for the Oct–Dec quarter
If missed, you’ll need to pay the Super Guarantee Charge (SGC) and lodge an SGC statement by 28 Feb 2026.
February
21 Feb 2026 – Lodge & pay January 2026 monthly BAS or IAS
28 Feb 2026 – Lodge & pay December 2025 quarterly BAS
Start 2026 Organised and Ready
The end of the year is the perfect time to review your tax position, payroll systems, and trust documentation — before things get busy again.
If you’d like tailored advice or help reviewing your tax or trust arrangements, we’re here to help.
Book a meeting with the True North team and start 2026 organised, confident, and in control.
