The Fringe Benefits Tax
The Fringe Benefits Tax (FBT) year runs from 1 April 2016 to 31 March 2017. Another tax planning strategy for business owners, is to determine if they have an FBT exposure and if so start to collect the relevant information in order to complete an FBT return for the year.
What is it?
FBT is a tax that would arise when employers provided benefits to their employees or an associated party as part of or in addition to a wage or salary package.
Here are some common expenditures of fringe benefits:
- Providing a company car for an employee’s private use.
- Paying for or reimbursing an employee’s private expenses.
- Providing a discounted loan to an employee.
- Benefits received from a salary sacrifice arrangement with an employee.
- Providing an employee with free tickets or other forms of entertainment.
- FBT is calculated on the taxable value of the fringe benefits provided.
The FBT rate for the year ended 31 March 2017 is 49%.
It is important to be aware that some businesses, including not for profit charities, may be eligible for exemptions and/or concessions which eliminate or reduce FBT liabilities. In most cases FBT is not allocated to contractor or volunteer benefits.
If you answered Yes to your business is required to submit an FBT return, what should you do now?
Determining FBT is complex maze. Please click on our webpage to download the FBT checklist before completing a return you should seek advice that is relevant to your business and specific circumstances.