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Christmas Parties and Staff Gifts: Avoid an FBT Hangover As the festive season approaches, many businesses are planning Christmas parties, staff lunches and end-of-year gifts to thank their teams for another year of hard work. But before the celebrations begin, it's worth checking the potential fringe benefits tax (FBT) implications. The Australian Taxation Office (ATO) has reminded employers that some Christmas celebrations, entertainment expenses and employee gifts may attract FBT, depending on the circumstances. When does FBT apply to Christmas parties and staff gifts? Not every staff celebration or gift attracts FBT. The tax treatment depends on several factors, including: Location: Is the event held on business premises or at an external venue? Timing: Does it take place during or outside normal working hours? Guests: Are employees attending alone, or are partners, family members, clients or contractors invited? Cost: How much is spent per person on food, drinks and entertainment? Gifts: What type of gifts are provided, and what is their value? These details can affect whether or not FBT applies and if an exemption or concession is available. Can Christmas parties and gifts be FBT-exempt? Certain expenses may qualify for an exemption, including the minor benefits exemption, depending on their value, frequency and circumstances. However, employers shouldn't assume that all Christmas parties or staff gifts are automatically exempt. The ATO recommends reviewing arrangements before committing to expenses and keeping appropriate records to support your FBT position. Plan ahead and celebrate with confidence A little preparation can help your business reward employees, manage costs and avoid unexpected tax liabilities. If you're planning a Christmas party, staff gifts or other end-of-year celebrations, contact Collins Hume on 02 6686 3000 for guidance on FBT obligations, available exemptions and appropriate record-keeping. Enjoy the festive season knowing your business has considered the tax implications. Please note that our team will be having a Christmas holiday break from 23 December 2026 — we'll reopen at 8am on 6 January 2027. Read more: Australian Taxation Office, Don't let your festive celebrations lead to an FBT hangover »

Why timing and the $75,000 electric vehicle threshold matter The existing full FBT exemption for eligible electric vehicles (EVs) is set to be reduced, with the timing of the relevant arrangement and the value of the vehicle determining how much of the concession remains available. Draft legislation proposes a staged transition to a permanent 25% FBT discount, with changes to take place from 1 April 2027 and 1 April 2029. Although the changes are not yet law, businesses and employees considering an arrangement involving an EV should understand how the proposed rules could affect their costs. What is changing Currently, eligible battery electric and hydrogen fuel-cell vehicles can qualify for a full FBT exemption when provided to employees for private use, provided certain conditions are met. Plug-in hybrid vehicles generally no longer qualify for new arrangements from 1 April 2025, although certain existing arrangements are protected. Under the proposed changes, the transition would operate as follows: Until 31 March 2027: The existing full FBT exemption continues for eligible EVs, regardless of the cost of the vehicle. From 1 April 2027 to 31 March 2029: Eligible EVs valued at $75,000 or less can retain the full exemption if the commitment to provide the vehicle is made before 1 April 2029. Vehicles valued above $75,000, but within the fuel-efficient luxury car tax threshold, would receive a 25% FBT discount. From 1 April 2029: All eligible EVs within the relevant luxury car tax threshold would receive a 25% FBT discount, rather than a full exemption, for new commitments. Existing arrangements are generally protected, subject to some transitional rules. However, changes to an arrangement may create a new commitment and affect its FBT treatment. Why EV timing matters The proposed changes could affect the cost of providing a company vehicle or entering into a salary packaging arrangement, including a novated lease. For example, an employee considering an eligible EV valued at $70,000 could potentially retain the full FBT exemption by entering into a qualifying commitment before 1 April 2029. By contrast, an eligible EV valued at $85,000 would generally move to the 25% discount for commitments made from 1 April 2027. From April 2029, the full exemption would no longer be available for new commitments, regardless of whether the eligible vehicle is valued above or below $75,000. Importantly, the $75,000 threshold is based on the vehicle's relevant value for FBT purposes, not necessarily its advertised drive-away price. Buyers should confirm the applicable value before making a decision. The date a vehicle is ordered or delivered may not, by itself, determine the outcome. The proposed rules focus on when a financially binding commitment to provide the vehicle is made. Changes to existing arrangements, including certain refinancing or employment changes, may also affect the concession. What should businesses and employees do? If you are considering an EV through your business or salary packaging, there are several practical steps to take: Review your options early. If you are planning to purchase an EV or enter into a novated lease, consider how the proposed changes could affect the timing and overall cost. Check the vehicle's value. Confirm whether it falls at or below $75,000 and whether it meets the relevant luxury car tax threshold. Confirm the commitment date. Speak with your employer or salary packaging provider to understand when the arrangement becomes binding and whether any proposed changes could affect its treatment. Compare the total cost. Consider the purchase price, lease payments, running costs and potential tax savings rather than choosing a vehicle based on the FBT concession alone. Consider other tax implications. An FBT-exempt vehicle may still give rise to a reportable fringe benefits amount, which can affect certain income-tested obligations and entitlements. Plan before committing The proposed changes are intended to maintain support for EVs while gradually narrowing the scope of the full FBT exemption. For businesses and employees, the key consideration is how the vehicle's value and the timing of the arrangement affect the available concession. If you are considering an EV purchase or salary packaging arrangement and want to confirm how the proposed changes could impact on the tax position, contact Collins Hume on 02 6686 3000. Reviewing your options now can help you understand the likely after-tax cost and make a decision that suits your financial and business circumstances. Please note that Collins Hume will be having a Christmas holiday break from 23 December 2026 — we'll reopen at 8am on 6 January 2027.

The most common errors when it comes to rental deductions Rental property deductions continue to be an area where many taxpayers make mistakes, leading to incorrect claims and the need for adjustments. Understanding common deduction errors can support accurate reporting and reduce the risk of compliance issues. Not apportioning interest expenses correctly If you own a rental property, you can claim deductions for interest you pay on your loan to: buy the rental property buy a depreciating asset for the property (for example, air conditioner) pay for deductible expenses, such as repairs, that arise due to renting out the property finance renovations and extensions to the rental property. You can’t claim the interest on any part of the loan used for personal expenses. For example: if you refinance or redraw funds from your rental property loan for private expenses – such as school fees or a holiday – you cannot claim this portion of your interest as a deduction. You must apportion interest expenses to only claim the portion related to the rental property expenses. This must be adhered to for the life of the loan. If the loan is refinanced, the apportionment must continue with any future lending too. Incorrect claims of repairs vs capital works We see a lot of errors in claims for repairs, maintenance and capital works expenses. It’s important that rental property owners understand the difference in the expenses they can claim immediately, versus those they can only claim over a number of years. Here's a recap: Fixing wear and tear, or damage to a property that occurred while renting it out is a repair. Repairs can be claimed as a deduction in the year they occur. Renovating or replacing an entire structure is an improvement. These are capital expenses, which can be claimed over time (generally 40 years). Adding or replacing something that’s not part of the structure (for example, a new appliance) is a depreciating asset. These are claimed over the asset’s effective life. Separating private use of a property Errors also occur where property owners aren't apportioning their expenses for any private use. This includes renting the property to family or friends below market rates, or keeping it vacant for their own use. If you: Only use part of the property to earn rent (for example, renting out a room in your home) – apportion the expenses based on the area of the property rented (area-based method). Rent out the entire property, but for only part of the year – apportion the expenses based on the number of days it was rented or held to produce rental income (time-based method). Charge below market rates of rent, and the expenses incurred are more than the amount of rent received – apportion the expenses by limiting them to the amount of rent derived from the property so there is no net rental income or loss. In certain circumstances, expenses must be apportioned using the area-based and time-based methods, for example, if part of the property is rented out for part of the income year. If you co-own a property, you'll also need to apportion these expenses according to their legal percentage of ownership. Where you use your rental as a holiday home you cannot claim ownership and use expenses, such as interest, rates and repairs unless they used or held it for use mainly for producing rental income. Make sure you're claiming the right rental property deductions. Collins Hume's tax specialists can help you understand what you can claim, avoid common mistakes and manage your investment property tax obligations. For tailored advice, contact our team on 02 6686 3000.

Collins Hume | YOU. That’s all we focus on. You, your family, your wealth and the legacy you (and we) leave. That’s it. Join us on this amazing journey. 360° Business Solutions. Business Advice Business Valuations Not-For-Profits Strategy360° At Collins Hume, our "360" approach means comprehensive, all-encompassing solutions tailored to your needs. Because everyone’s journey is different, we take a holistic approach to helping you. Whether optimising finances, growing your business or securing your legacy, we provide a full-circle strategy that puts you at the centre. Let’s navigate your success together. Business owners often face challenges such as unpredictable growth, financial inefficiencies, and the need to navigate complex market environments. Strategy360 by Collins Hume simplifies these complexities by providing tailored strategic advisory services designed to improve profit, boost cash flow and enhance your business’s long-term value. Through expert guidance in financial management, business restructuring and succession planning, we help you overcome operational hurdles and maximise opportunities. Our proactive approach ensures we address common frustrations, such as poor cash flow management or inadequate risk mitigation, transforming them into strategic advantages. By partnering with Strategy360, you’ll gain clarity and control over your operations, improve profitability, increase business value, and secure a sustainable future for your business. Elevate your business to new heights. Contact Nathan McGrath on 02 6686 3000 for an obligation-free discussion on how Collins Hume can help you tailor a program to suit your requirements. Wealth360° Do you ever wonder if you're on the right path to creating wealth and securing your financial future? Is your superannuation working as hard as it could be? Are you paying too much tax, or could your investments be better structured? What about leaving a legacy? Will your family be hit with significant taxes or risk losing it due to failed business operations, bankruptcy or divorce? At Collins Hume, we bring the experience and expertise to guide you through these important decisions. Working closely with a trusted network of financial planners, lawyers, finance brokers, and retirement specialists, we tailor personalised solutions to maximise wealth, protect assets, and pass them on to future generations. With our proactive, holistic approach, you’ll have peace of mind knowing your financial affairs are in order so you can enjoy a comfortable retirement. Partner with Collins Hume today to safeguard your future, minimise tax, and secure financial stability. Tax360° At Collins Hume, we provide strategic tax solutions that minimise your tax, create wealth, and protect your assets. We go beyond the usual ATO compliance lodgements and work with YOU to educate and empower you to make smarter, more informed financial and tax decisions. By focusing on business and investment structuring, tax minimisation, and long-term wealth creation, we help you optimise your tax position and meet ATO deadlines so you can focus on yourself and your business. Whether you're an investor or a business owner, we partner with you to minimise tax, safeguard your family’s assets, and achieve your financial goals. Let us guide you through the complexities of the tax system to build a secure, successful future. Books360° Managing the books can be overwhelming and time-consuming for business owners. And let’s face it, your time and expertise are better focused on other parts of your business. Books360 by Collins Hume takes the stress out of managing your ATO obligations. Whether you need BAS lodgement, payroll, or one-off bookkeeping expertise, our specialist team ensures accuracy and compliance so you can focus on growing your business. Work with us today to streamline your bookkeeping and ensure you meet the ATO’s relentless deadlines. We help simplify your operations and provide real-time financial insights. Being efficient and adopting technology saves you time, reduces costly errors, and improves cash flow, directly benefiting your bottom line. With the expertise of our experienced bookkeepers, including Certified Xero Professionals, you’ll have peace of mind knowing your books are in order. Let Books360 by Collins Hume keep your business running smoothly.

Collins Hume | YOU. That’s all we focus on. You, your family, your wealth and the legacy you (and we) leave. That’s it. Join us on this amazing journey. STRATEGY360° Business Advice Business Valuations Not-For-Profits Inspiring meaningful advice for your business Just as elite athletes rely on expert coaching teams to unlock their potential, businesses can achieve greater success with guidance from an experienced advisory firm. Our advisers provide strategic insights and practical solutions to help businesses overcome cash flow, risk management and succession challenges. Expert advice helps businesses navigate challenges, make informed decisions, and drive growth, profitability, and value. This partnership turns obstacles into opportunities, ensuring long-term success and competitiveness. As well as being award-winning accountants, Collins Hume are also highly sought-after Business Advisers who help business owners and business leaders implement plans and actions that add value to their businesses. Our holistic business solutions help business owners: Increase the financial returns they earn from their business Grow the valuation of their business, de-risk and reduce owner reliance, or prepare a business for sale Tap into mentoring to provide direction, accountability, and knowledge to help them reach their business goals. Does any of this ring true for you? Are you ready to improve your profit, boost cash flow and enhance your long-term business value? Contact Nathan McGrath on 02 6686 3000 for an obligation-free discussion on how Collins Hume can help you tailor a program to suit your requirements. Knowing Business Value Helps Build What Comes Next Sep 16 Business valuation and cash flow support Cavvanba’s growth Aug 17 Byron Homemade Pizza: From Passion to Purpose Jul 8 1 2 3 4 Our purpose Inspire business owners to achieve success in powerful and meaningful ways. We simplify the complexities of business, partnering with you to focus on achieving meaningful and worthwhile outcomes, specifically: Improving cash flow and profit performance Increasing the value of your business Enhancing the lifestyle outcomes you experience from owning a business Harnessing your purpose and legacy. Strategy360 Resources Capital Gains Reform Now Law Will your business be ready for 1 July 2027? Business Valuation Services Know what your business is worth and what drives value. Budgeting & Forecasting Forecast with confidence. Budget with purpose. Grow with clarity. Business Benchmarking Gain clarity. Outperform the competition. Sharpen your focus. Business Improvement Program Unlock the full potential of your business. Business Planning Program Strengthen your business for the future. Cash & Profit Assessment Unlock cash flow. Boost profit. Grow stronger. Not-For-Profit Strategic Improvement Program Strengthen your impact. Future-proof your organisation. Risk & Value Driver Assessment Optimise your business for growth, resilience & higher market value. This is us Unlock the difference between industry average results and industry-leading benchmark businesses. Sounding Board Services Strategic support for business leaders. You, that’s all we focus on. You, your family, your wealth, your business and the legacy you (and we) leave. That’s it. You’ll access services designed to enhance growth, drive value creation, foster sustainable development, and navigate key transitions and challenges with us. Contact Nathan McGrath on 0435 400 202 for an obligation-free discussion on how Collins Hume can help you tailor a program to suit your requirements. Contact Nathan

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