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:
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.
The FBT rate of tax for the year ended 31 March 2011 is
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
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
the cost of taking staff and their partners out to lunch;
cost of taxis and limousines to and from meal entertainment
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.
The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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