As the year winds down and the holiday season approaches, small business owners across the Sunshine Coast start asking the same questions:
- Can I claim the staff Christmas party?
- Are client gifts tax-deductible?
- How do I plan ahead for holiday cash flow?
- Is it too late to review my business goals for the year?
If you’re a tradesperson, builder, or service-based business owner, October is the perfect time to tidy up your financials and plan ahead—before the end-of-year rush takes over.
At VBA, we’ve put together this handy End-of-Year FAQs blog to answer the common accounting and planning questions we hear every October. Here’s what you need to know to finish strong in 2025 and set up for success in 2026.
Are Christmas Parties Tax Deductible?
We get this one a lot. Here’s the short answer: sometimes. It depends on who’s attending, where it’s held, and how much you spend.
Under Australian tax law, entertainment expenses—like food and drink—aren’t usually deductible. But there are exceptions under the Minor Benefits Exemption.
Here’s how it works:
- If you hold the party off-site (like at a restaurant), and it costs less than $300 per person, you may be able to avoid Fringe Benefits Tax (FBT) using the minor benefits exemption.
- However, even if you don’t pay FBT, the cost may not be tax-deductible and you generally can’t claim GST credits.
Example:
You shout your crew to dinner at the pub; $150 per person. No FBT applies, but the expense isn’t deductible.
If you throw a party that does attract FBT (e.g., more than $300 per person, or partners are invited), then the expense is deductible—and you may be able to claim GST. But you’ll need to pay FBT on it.
So what’s the best approach?
Keep it simple. Stick to under $300 per person and treat it as a team thank-you rather than a tax strategy.
Are Christmas Gifts for Staff or Clients Tax-Deductible?
Gifts are another grey area that depends on the type of gift.
Gifts to Employees:
- Non-entertainment gifts (like gift cards, hampers, or tools) under $300 are typically exempt from FBT, tax-deductible, and GST claimable.
- Entertainment gifts (like movie tickets or event vouchers) are not deductible if they fall under the minor benefits exemption.
Gifts to Clients or Suppliers:
- Non-entertainment gifts (like a bottle of wine, branded merch, or a food hamper) are generally tax-deductible, as long as the gift is given with the intention of generating business.
Not deductible:
- Entertainment-based gifts to clients (e.g. concert tickets, golf days) are not deductible.
VBA Tip:
If you’re planning a bulk order of Christmas gifts, ask us to review your plans. A small tweak could mean the difference between a deductible and non-deductible expense.
How Should I Plan for Staff Holiday Leave?
This is one of the trickier aspects for trade and construction businesses, where December and January can be either your busiest or quietest time.
You’ll want to make sure you’ve:
- Budgeted for annual leave payouts
- Tracked public holidays (especially if you’re paying penalty rates)
- Set clear shutdown dates (and communicated them to your team and clients)
Some employers in the trades also choose to close down over Christmas—in which case, you may direct employees to take leave, provided it’s done with reasonable notice.
VBA Tip:
Review your payroll liabilities in Xero or MYOB and set aside cash for superannuation and leave entitlements. This helps avoid surprises during the summer slowdown.
What Can I Do Now to Improve Cash Flow Over Christmas?
Planning ahead is critical. We recommend:
- Invoice early – Don’t wait until December 20 to send your invoices. Get work signed off and invoiced as early as possible.
- Follow up debtors – October is a great time to chase unpaid invoices before clients disappear for the holidays.
- Plan for January – Many small businesses forget to account for slower income in January. Factor in GST, PAYG and super due in February.
VBA Tip:
Set a goal to have your December BAS ready to lodge early in January, even if you don’t lodge it until the due date. It puts you in control of your cash position.
Should I Do a Business Review Before the Year Ends?
Yes—October or early November is the perfect time to review your year-to-date performance. Here’s what we suggest:
- Compare actuals to budget: How did your revenue and expenses compare to what you planned?
- Review job profitability: Especially in construction, it’s easy to win work but lose margin. Which jobs made you money?
- Check your structure: Are you still trading under the right entity? Could a restructure reduce tax or risk?
- Forecast the next quarter: Set goals now so you hit the ground running in 2026.
VBA Tip:
Book in for an end-of-year business review with us in October or November. It’s a great way to check your numbers, review your tax position, and talk strategy.
Wrap-Up: Your End-of-Year Business Checklist
Here’s a quick summary of what you can do now:
– Budget for holiday leave and bonuses
– Plan and document your Christmas party (under $300 pp)
– Choose tax-effective staff and client gifts
– Invoice early and follow up slow payers
– Book an end-of-year review with your accountant
– Reflect on your goals and set up for 2026
Need Help Planning for the Holidays?
At VBA, we work closely with small and medium businesses across the Sunshine Coast—especially in the construction and trade sectors. If you want help reviewing your numbers, understanding your holiday obligations, or just making better decisions before year-end, we’re here to help.
Contact us to book an end-of-year review or strategy session. Let’s get your business in great shape—before the silly season starts.
