Gifts, lunch and boats – what can you claim?

Business

A Brief Guide to Claimable Entertainment Expenses

We are the preferred accountant for the Real Estate Institute of New Zealand and look after a lot of real estate agents.  However, this information relates to all sectors. If you want to see the complete set of rules, click here for the IRD guide.

Here’s some helpful information about what you can claim and how much:

The general rule about expenses that you can claim against your income to reduce your tax bill is that you can claim anything that is related to the production of your income.  But there are some curly bits in the entertainment area as there is often a blurred line between personal and business expenses.

  • If it’s purely personal (taking Mum out to dinner), you can’t claim it.
  • If it’s any of the following, you can claim 50%:
    • A corporate box
    • Cost of a boat for entertaining customers or employees
    • Gifts to purchasers like a bottle of bubbles when you settle a deal
    • Food and drink at your office for a social event like a party or function
    • Off-site food and drink such as taking a client to lunch
  • You can claim 100% of the following:
    • Food and drink whilst travelling for business
    • Food and drink provided at a conference
    • Morning and afternoon tea for your team
    • Freebies to promote your services as long as you only give them to clients (not your team or people you know personally)

If you’re a client of Beany, you don’t need to worry, we will take care of this for you. Contact support@beany.com at any time if you want to check a particular item.

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