With the new FBT year (Fringe Benefits Tax) due to start on 1 April 2016, it’s worth highlighting a couple of changes to fringe benefits tax that are due to come into effect on this date.
The Government has announced the introduction of a separate grossed up cap of $5,000 for FBT salary packaged meal entertainment and entertainment facility leasing expenses.
The elective valuation rules are no longer to be used to calculate the taxable value of these benefits. Benefits exceeding the $5,000 grossed-up cap can be counted when calculating whether an employee exceeds their existing FBT exemption or rebate cap.
All salary packaged meal and other entertainment benefits will become reportable to the employee’s payment summary if they exceed the reporting threshold.
At present, employees of public benevolent institutions and health promotion charities have a $30,000 FBT exemption cap (this will be $31,177 for the first year of the measure) and employees of public and not for profit hospitals and public ambulance services have a $17,000 FBT exemption cap (this will be $17,667 for the first year). These employees can also benefit from salary sacrifice meal and entertainment benefits with no FBT payable by the employer and without it being reported.
Those employees of rebatable not-for-profit organisations can salary sacrifice meal entertainment benefits, however, the employers only receive a partial FBT rebate, up to a standard $30,000 cap ($31,177 for the first year).
Furthermore, with these changes to fringe benefits tax, the rules for individuals claiming car expense deductions have changed.
As a result, if you reimburse expenses relating to an employee’s use of their own car, only two methods will be available to calculate the taxable value of this fringe benefit (when you apply the ‘otherwise deductible’ rule).
The two methods are:
- The log book method
- The cents per kilometre method (a single rate of 66 cents per kilometre now applies).
If you would like to learn more about these changes to fringe benefits tax or if you’re unsure whether something would be classed as a fringe benefit or you’d like us to take care of your FBT return, don’t hesitate to give a small business accountant from Taggart & Partners a call on 07 3391 1188.