Tax filing - what is considered "entertainment"

[jack2016]

I read on the IRD what you can claim in running your business includes 50% of "entertainment".

But it doesn't say who you are entertaining - whom can your business entertain?

Thanks

[Anthonyacat]

Employees, Customers, Suppliers.

https://www.ird.govt.nz/topics/income-tax/fringe-benefit-tax/entertainment-expenses

Most small property investors will not have much if any entertainment expense. You could perhaps make a claim if you take tenants out to lunch to get to know them. That sort of thing.

I know of one big investor who holds a Xmas party and invites all his tenants and other property contacts. And I used to live in a boarding house in Ellerslie where the owner turns up every Xmas and provides a BBQ lunch and gifts for the kids.

[jack2016]

thanks very much.

my neighbour told me (he runs a company of a few hundred employees) that he (or she) puts all his family dining on the company credit card.

hence i enquired!

[Anthonyacat]

thanks very much.

my neighbour told me (he runs a company of a few hundred employees) that he (or she) puts all his family dining on the company credit card.

hence i enquired!

Yes very common and very not allowed. While he will probably never get caught, if IRD ever asked he could potentially be asked to justify he reason behind every claim, and get some nasty penalties when some are disallowed.

[jack2016]

thanks.

what if you are self employed have no employees. working in a place with many other people, can your company shout the people coffee at your workplace?

those at the workplace are neither employee, client or supplier.

thanks again.

[ripeka]

thanks very much.

my neighbour told me (he runs a company of a few hundred employees) that he (or she) puts all his family dining on the company credit card.

hence i enquired!

It fascinates me how people can think this is in any way legal or ethically ok. Fingers are often pointed at beneficiaries in this country and something like "benefit fraud" is often a hot topic because it is "tax payers' money". BUT No-one much talks disparagingly about business owner, white collar fraud like this or the cash jobs that regularly go on etc. Yet it is blatant tax dodging. Business owner I know fills his personal boat up on the company fuel card. Interesting how subjective our assessment of what's ok or not can be depending on our personal interest.

[BlueSky]

thanks.

what if you are self employed have no employees. working in a place with many other people, can your company shout the people coffee at your workplace?

those at the workplace are neither employee, client or supplier.

thanks again.

NOT ALLOWED. where you going with this ?

[Bob Kane]

Why would your company want to entertain strangers?
You can be generous to others but that doesn't make it a deductible expense.

[jack2016]

NOT ALLOWED. where you going with this ?

just asking as I've heard of people doing that too. just wanted to know what's allowed.

[jack2016]

Why would your company want to entertain strangers?
You can be generous to others but that doesn't make it a deductible expense.

ok thanks.

[Keys]

I have heard that companies have an annual review. We have an annual review every 8 weeks and have that over a lunch. Topics are many and varied but work related.

[jack2016]

Thanks keys

[BlueSky]

Thanks keys

. Companies with employees, not sole in charge.


IRD will triple slam you with penalties so not worth it in my books.

Dont be naïve

[jack2016]

. Companies with employees, not sole in charge.


IRD will triple slam you with penalties so not worth it in my books.

Dont be naïve

yes boss i know, i was just being polite. definitely not worth it for a few bucks

[BlueSky]

All good.
when you said "

my neighbour told me (he runs a company of a few hundred employees) that he (or she) puts all his family dining on the company credit card and shouting coffee to strangers I thought to myself who would do this? You would have failed on the intention test