What You Need to Know About FBT 2021: Tax & Benefits
Ask anyone about FBT or Fringe Benefits Tax, and they’ll probably tell you how much they don’t like it. Not only is it incredibly confusing, but it also involves a lot of paperwork. And like with many other things, the pandemic and the lockdowns that came with it has made this more complicated than ever before.
To help you understand FBT more, the team behind New Wave Accounting will be discussing the basics and some of the things that you need to know about the COVID-19-related changes that have been made:
What is a Fringe Benefit?
A fringe benefit is a ‘payment’ that you give to an employee or an associate that is not their salary or wage. The benefit doesn’t have to be monetary. It could be something like giving them car parking, allowing the use of a company vehicle, or providing discounts for services or products of the company.
If you still haven’t registered for FBT, you have to know if fringe benefits have been given because the ATO will be paying close attention to unregistered employers and scrutinize any data mismatches and discrepancies.
What is Exempt from FBT?
There are certain benefits that are not included in FBT rules, given that they are provided so the employee can use them for work. Examples of these benefits are:
Portable electronic devices like laptops, tablets, printers, and others (note that large businesses have a limit of reimbursement for one device per employee per FBT year)
Briefcase or bag used to carry items required for work (unless also used for purposes outside of work, then it will not be fully exempt)
Tools of trade
Any item or service provided to the employee not amounting to more than $300 and is only given one time.
Due to the impact that the COVID-19 pandemic has on most industries, the ATO has also implemented some changes with the way they approach FBT compliance.
If you provide emergency assistance to employees in the form of accommodation or transportation (if the employee is at risk of being affected by the pandemic), that will be exempt from FBT. Others that will not be subject to FBT include:
Expenses incurred for employee relocation, including flights from other countries going home to Australia
Expenses incurred for food and accommodation if an employee is stranded due to travel restrictions
Benefits provided to the employee so they can self-isolate or quarantine
Transport expenses for employees to and from temporary accommodation.
Flu vaccines are generally not subject to FBT as it is work-related preventative care. Note that health care treatment will only be exempt from FBT if given at the workplace or a space adjacent to the site. Ongoing medical costs are not exempt.
This is a bit tricky. A company vehicle kept at an employee’s home will attract FBT, unless the car hasn’t been driven the whole period when the business was not in operation and only used to conduct car maintenance. That said, you need to keep records of the odometer as proof that the car hasn’t been used.
These are only some of the things that you need to know about the changes in FBT in relation to the pandemic.
ATO can be strict when it comes to FBT so you need to make sure that there are no mismatches on the information that you provide them. However, for some, keeping track of fringe benefits and knowing which ones are exempt and which ones are not can be very confusing. For this reason, things like this are better handled by a reliable company accountant who is knowledgeable in this area.
If you are in need of a seasoned tax accountant on the Gold Coast who can help you with FBT and other tax-related matters, New Wave Accounting should be your top choice. We can help provide you with expert services for accounting and bookkeeping so you can focus on running your business. Contact us today to know more!