The Fringe Benefits Tax 2013 year ended on 31 March 2013, as some of you may know.
As an employer, you should consider all those benefits provided to employees and associates, separate to salary or wages, where there is private use attached in respect of the Fringe Benefits Tax (FBT) year ended 31 March 2013. These may come under the legislation for fringe benefits and should be carefully documented.
Fringe Benefits Tax arose to prevent employers reducing their employee’s tax liabilities through making benefits available which were not recognised as income.
As a result, you need to review your accounts to ensure that you are compliant with your FBT obligations.
To determine whether you have an FBT liability for the 2013 year, firstly review the below list of major types of benefits. If you believe a particular type of benefit has been provided or are unsure, please contact our office for further assistance.
The following is a brief explanation of the major types of benefits that
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are potentially caught in everyday business dealings.
Motor Vehicles
Essentially, this type of benefit arises where a vehicle owned by an employer makes a car available to their employee and associates for private purposes in respect of their employment, notwithstanding that the vehicle is also used for business purposes. Generally, this situation arises where an employee is provided with a vehicle for travel between home and work or uses a vehicle for any other private use.
Car Parking Fringe Benefits
Car parking facilities provided by an employer to an employee may give rise to a car parking benefit.
Loan Benefits
A loan fringe benefit arises where an employer makes
a loan to an employee or associate, including a director, in respect of their employment.
Expense Payment Benefit
An expense payment benefit arises where an employer pays or reimburses private expenses incurred by employees, including directors. For example, telephone.
Property Benefits
A property benefit arises when an employee is provided with property, free or at discount, by an employer. Property includes goods (eg. items of clothing), real property such as land and buildings and other property such as shares and bonds.
Housing and Living Away From Hone Allowance
A benefit or allowance provided to an employee for meals and accommodation whilst living away from their usual place of residence to carry out their employment duties.
Entertainment
This is one of the most complex areas of Tax Law. Depending on the type of entertainment provided and the circumstances in which the benefit was provided, the entertainment could be one of a number of types of fringe benefits as listed here.
Meal Entertainment Fringe Benefits
A meal entertainment fringe benefit consists of entertainment by way of food and drink, travel and accommodation in connection with the entertainment is also included.
Residual Fringe Benefit
Essentially, any other benefits you may have provided to employees in respect to their employment are covered by residual fringe benefits. Examples of residual fringe benefits are free or discounted services, such as travel or advice given by a solicitor, the use of employer’s property, such as video camera or tv, and the provision of insurance coverage. The provision of vehicles other than cars, (e.g. hire taxis, work horse vehicles, rental cars, trucks and motor cycles) also fall under this category.
Fringe Benefits Provided by an Arranger or Facilitator
As long as there is an employee/employer relationship in existence, a fringe benefit can be provided by a third party (an arranger) under arrangements between the arranger and the employer (or associate of the employer). In these cases there will be a fringe benefit provided to the employee or associate of the employee.
If you wish Rubiix to undertake an FBT Review of your accounts and highlight any exposure and/or planning opportunities, please contact our office or send an email through our website.