The two main exemptions to FBT that could apply to Christmas parties, according to the ATO, are exempt property benefits and exempt minor benefits.

Exempt property benefits as defined by the Tax Office are –

* Christmas party costs include things like food and drinks served for employees as part of a Christmas party

* The cost to provide these goods is exempt from FBT if they are provided on a working day on business premises and consumed by current employees of that business.

If the property benefits exemption doesn’t apply because the party is held at a restaurant or separate venue, the Taxation Office said the costs may be considered minor benefits and FBT exempt.

Exempt minor benefits as defined by the ATO are -

* cost per employee must be less than $300

* the exemption also applies to associates of employees such as spouses and children, provided the cost is less than $300 per associate

* gifts are also considered separately from the Christmas party so, provided the cost of a gift and the party are each less than $300, then both would be exempt from FBT.

The Tax Office has a fact sheet Fringe benefits tax and Christmas parties which explains the FBT implications of company’s Christmas celebrations.

In releasing its Compliance program 2009-10, Mr D’Ascenzo said the Tax Office will continue its strong program of help and assistance for businesses and individuals facing genuine hardship during the economic downturn.

“People can struggle with their tax and superannuation obligations in times of uncertainty,” he said.

“To help businesses through these tough times we are providing a range of practical support measures to keep them engaged with the tax system including help to pay existing tax debts without interest.

“When many in the business community are doing it tough, it is even more important that the system is seen as fair and equitable.

“Our work to make sure people meet their obligations ensures there is no unfair advantage for those who don’t.”

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The announcement was made following the High court’s decision on the legality of the tax bonus payments.

The legality issue was raised by a law lecturer who asserted that the tax bonus does not comply with the Constitution.

Tax Commissioner Michael D’Ascenzo said if people have lodged their 2007-08 tax return and meet the eligibility criteria they don’t need to do anything else to receive the payment.

“We will be progressively sending payments to the address or bank account people nominated as their preference in their 2007-08 tax return – unless they updated those details since then,” Mr D’Ascenzo said.

“Eligible people who have received their 2007-08 notice of assessment before 27 March 2009 can expect to receive their payment between next week and 16 May 2009.

“Those who received their notice of assessment after 27 March 2009 can expect their tax bonus payment around four weeks after they received their notice of assessment.”

For those whose returns are still outstanding, the Tax Office said that they must lodge their returns by 30 June 2009 to be eligible.

The tax bonus payment of up to $900 will start from early next April 2009 and are tax free.

If you have already lodged your 2007-08 tax return the Tax Office will automatically calculate your eligibility and entitlements and send your payment to you.

Your payment will be deposited into the bank account you nominated in your 2007-08 tax return or sent as a cheque to the address on that return.

If you have already lodged your 2007-08 tax return and your bank account or address details have changed since then, you need to call the Australian Tax Office number at 1300 686 636.

In a related news bulletin, the Tax Office has repeated its warning about bogus phone calls and other scams relating to the Government’s tax bonus payments.

These calls may relate to obtaining personal information including credit card or banking details or promising to facilitate the tax bonus payment in exchange for a fee.

The Tax Office advised that under no circumstances should personal information be given out to these callers or in response to unsolicited emails. The Tax Office also doe not charge a fee to provide the tax bonus payment. #

Tax Commissioner Michael D’Ascenzo said the Tax Office will take the same administrative approach it used for the large number of donations made after the 2004 Boxing Day Tsunami.

“It’s important in tragic times like these that we support the community and make it as easy as possible for people to help,” Mr D’Ascenzo said.

“People who give to ‘bucket donations’ can claim a tax deduction equal to their contribution up to $10 in their 2008-09 tax return without the usual need to keep a receipt.

“Many people will use the web or phone to make a donation over $10, so their web receipt or credit card statement will be enough. Others are provided with a receipt for their contributions.

“This also will apply to donations collected through third parties such as banks and retail outlets.

“It’s important people donate to an organisation that has been endorsed so they can claim a tax deduction.

“Most major charities are endorsed, so it’s often easier to provide donations to one of the existing and well-established organisations.”

If you’re not sure whether the organisation you’re donating to is endorsed the Tax Office lists them as ‘deductible gift recipients’ on its website www.ato.gov.au

“In times of natural disaster our first thoughts are for the safety and well-being of those affected. Tax issues should not be something they need to worry about,” Mr D’Ascenzo said.

“In the next few days, we will release information about how we intend to help people directly affected by natural disasters with any tax issues.”

The Tax Office said yesterday that the email is similar to previous scams and uses the Tax Office logo and the words ‘Notification – Please read’ or ‘Australian Taxation Office – Please Read This’ in the subject heading.

There may also be more variations to these subject headings, the ATO said.

The email asks people to click on a link which directs them to a bogus website that looks similar to the Tax Office website and asks for credit card and personal details.

The Tax Office warns that it never sends emails asking people to provide personal information including credit card details.

Tax Commissioner Michael D’Ascenzo said anyone who receives the email should delete it immediately.

The perpetrators of this scam are often set up in multiple jurisdictions, said the Tax Office, thus making them difficult to trace and to effectively shut them down.

If people have entered their credit card information on the website, they should immediately report it to their credit card provider.