Fringe Benefit Tax and COVID-19

tax fringe benefits

The Fringe Benefit Tax (FBT) year end is upon us again. To assist with this year’s FBT preparation, we highlight some key changes and strategies (taken into consideration of the impact of the COVID-19 pandemic) as follows:

Car Fringe Benefit Concessions

During COVID-19 for security and maintenance purposes, many employers requested their employees to garage their company cars at home. Normally, for FBT purposes this would be deemed to be available for private use.

However, for this year only, concessions are available to reduce the FBT exposure if the following are satisfied:

  • The home-garaged car has not been driven for private purposes; or
  • Has only been driven briefly for the purpose of maintaining the car (e.g driven less than 30 minutes or 10 kilometres per week); and
  • Calculating taxable value using the operating cost method (you must have a valid logbook – prior year logbooks are acceptable for the 2021 FBT year)

A car is not available for private use if it is parked at the employer’s premise during office closure period.

Car Parking Benefit

Due to the COVID-19 lockdown and office closures, car parking fringe benefits can be reduced under the following situation:

  • No car parking benefit has been provided on the days that your office and work car park is closed;
  • No car parking benefit has been provided on the days that all of the commercial parking stations within a 1km radius of your business premises are closed or offer free parking;
  • No car parking benefit has been provided for the 2021 FBT year if, on 1 April 2020, the lowest fee charged by all of the commercial parking stations within a one kilometre radius of your business premises for all-day parking was less than $9.15

Working from home

Employers may provide their employees with items to allow them to work from home due to COVID-19. The items provided to employees must be intended to be returned to the employer eventually.

Usual exempt items (if they are primarily used for work) include:

  • Laptops
  • Portable printers
  • Other electronic devices such as mobile phone and tablet

Other items may also be exempt if the benefit provided is under $300. Employers may consider what benefit they are providing to take advantage of the minor benefit exemption. For example, provide a $500 monitor to an employee is not a minor benefit but providing the use of the $500 monitor is.

Emergency accommodation, food, transport

You will not have to pay FBT if you provide emergency accommodation, food, transport or other assistance to an employee if:

  • the benefit is emergency assistance to provide immediate relief, and
  • the employee is, or is at risk of being, adversely affected by COVID-19 or COVID-19 related government quarantine policy (e.g employee trapped in another state/country while on work travel).

Emergency health care

There is a limited exemption from FBT if you provide emergency health care to an employee affected by COVID-19. It only applies to health care treatment provided:

  • by an employee of yours (or an employee of a related company)
  • on your premises (or premises of the related company)
  • at or adjacent to an employee’s worksite

If you pay for your employee’s ongoing medical or hospital expenses, FBT applies (minor benefit exempt may still apply).

However, if you pay to transport your employee from the workplace to seek medical help, the cost is exempt from FBT.

Others

  • Providing flu vaccinations to employees is exempt from FBT if it is offered to all employees
  • Providing COVID-19 testing to employees is exempt from FBT if it is offered to all employees
  • Providing masks, PPE and sanitary products (up to a maximum of $300) is exempt from FBT if it is offered to all employees
  • Paying for non-refundable costs for cancelled events are not subject to FBT. However, reimbursing employees costs for a cancelled event (that the employee has paid) is an expense payment fringe benefit

Due Date

FBT return lodgement and payment due date if lodged by tax agents is now the 25th of June 2021.

As always, should you wish to discuss or require assistance with any of the above or other FBT matters, we are available to support you. Please don’t hesitate to get in contact with your Morrows advisor today.

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