Article by Moore Stephens
The end of the 2010/11 fringe benefits tax (FBT) year, 31 March 2011, has passed and that means, that FBT returns will soon need to be lodged.
A fringe benefit is basically a benefit which does not represent salary and wages and is provided to somebody because they are an employee. However, not all benefits are subject to FBT. Certain benefits such as superannuation contributions are specifically exempted from FBT.
Where we usually prepare the FBT return for your business, we ask that you collect all relevant FBT records relating to any benefits provided, such as:
- motor vehicles;
- car parking;
- meal entertainment;
- expense payments; and
- living away from home allowances;
together with travel diaries, employee declarations, etc.
Please call if you need to make an appointment or discuss the records needed. The following is some general information about FBT as it may apply to you and your business.
FBT rate
The FBT rate of tax for the year ended 31 March 2011 is 46.5%.
Minor benefits exemption
Fringe benefits with a taxable value of less than $300 may be exempt from FBT if they are provided on an irregular and infrequent basis.
For a benefit to qualify for this exemption, the benefit must have a GST-inclusive taxable value of less than $300.
Meal Entertainment – what is it and when are you caught for FBT?
Meal entertainment is always a problem for FBT purposes because it relates to the provision of food and drink which may not be liable to FBT depending on the circumstances.
The following are examples of meal entertainment:
- restaurants where family and clients are entertained;
- food and drinks provided at a staff social function;
- food and drinks provided to employees at functions on Friday nights;
- the cost of taking staff and their partners out to lunch; and
- cost of taxis and limousines to and from meal entertainment venues.
An employer who has provided meal entertainment fringe benefits may work out the taxable value of their meal entertainment under one of these three methods:
- 50/50 split method;
- 12 week register method; or
- actual expenditure incurred on meal entertainment method.
If you think you may have provided 'meal entertainment', we can help you choose a method to substantially reduce the FBT payable.
This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2009 Moore Stephens Australia Pty Limited. All rights reserved.