Holiday Expense Management & Tax Deductibility
As the festive season approaches, it’s a good time to revisit the rules around entertainment expenses to avoid any surprises at tax time. Many holiday-related costs — such as staff Christmas parties, client lunches, or gifts — may only be 50% deductible for tax purposes.
Examples of 50% deductible expenses include:
Staff and client meals, drinks, and entertainment
Christmas functions held offsite (restaurants, bars, events)
Food and drink provided at workplace celebrations
However, some expenses are 100% deductible, such as:
Gifts of food, wine, or hampers given to clients for business purposes
Meals provided while travelling on business
Staff gifts not related to entertainment (e.g., vouchers, non-food items)
When in doubt, keep clear records and talk to your accountant before claiming — it’s always easier to clarify at the time than to correct later.
Cash Flow Management During the Holiday Period
The December–January period can be one of the most challenging times of the year for cash flow. With public holidays, reduced trading hours, and staff leave, many businesses experience slower income but ongoing expenses such as wages, rent, and tax payments.
To keep things running smoothly:
Plan ahead: Forecast your cash flow through January and February.
Set aside funds for PAYE, GST, and provisional tax due in the New Year.
Invoice early and follow up promptly to keep cash coming in.
Delay non-essential spending until trading returns to normal.
A little planning now can make all the difference in avoiding post-holiday financial stress.
