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We want to take this opportunity to wish you and your family a safe and happy Christmas.
It has been a big year for all of us at Strategic 360 and we thank you for your continued support.
This months newsletter delves into the age old questions that continually surround Christmas and tax deductions.
What can you do to make the staff Christmas party tax deductible? Are client gifts deductible? What about gifts for staff? Deductibility for parties generally boils down to whether or not the party constitutes a fringe benefit and whether your business is liable for fringe benefits tax. Deductibility for client and staff gifts depends on the dollar value, reason and nature of the gift. Deductibility and Christmas is always an area of confusion for many. If you don’t get it right, it can become costly. Our advisors can help you navigate the complex rules around Christmas, parties, gifts and Fringe benefits tax.
What's ahead for 2025
The 2025-26 Federal Budget has been brought forward to 25 March 2025. This suggests an election will be held in either March or May 2025 but no later than 17 May 2025.
The Senate pushed through 32 Bills on the final sitting day of parliament for 2024 including seven of direct relevance to business and to the financial interests of some Australians. However, two key announcements remain in limbo: The proposed Division 296 tax, which imposes a 30% tax rate on future earnings for superannuation balances above $3 million, is proposed to commence from 1 July 2025, however has not yet been passed in. In the 2024-25 Federal Budget, the government announced the extension of the $20,000 instant asset write-off threshold for small business for a further year to 2024-25. This concession was removed by amendment from the enabling legislation at the last minute in the final sitting of Parliament of 2024. The removal of this measure is unfortunate, as once again, SMEs now have no confidence about the tax treatment of investments in assets that they might be looking to make, or have made, in the current financial year.
At the last Reserve Bank Board (RBA) meeting, RBA governor Michele Bullock recognised the easing of headline inflation from 5.4% to 2.8% over the year to September 2024 but suggested that the economy still has some way to go before inflation is sustainably within the 2% to 3% target range. The RBA appears wary of volatility and wants to see inflation sustainably trending down before making
any move. Commbank is predicting a February 2025 rate cut, ANZ and Westpac May 2025, and NAB June 2025.
Through the year, Australia’s economy grew 0.8%, the lowest rate since the COVID-19 affected December quarter 2020. Economic activity in the Australian economy right now is heavily dependent on Government spending. Slow and steady is the expectation for 2025.
Read our newsletter for more tax and super changes, how the ‘Trump effect’ will impact on Australia’s tariffs, new standards for fuel efficient cars, and how wage theft has now been criminalised from 1 January 2025 – how this effects employers.
Please feel free to contact us anytime if you’d like to explore or discuss any items in this months newsletter.
Kerrily and Louise – Directors
