It is now time for businesses to determine if they have an FBT exposure and if so start to collate the relevant information to complete an FBT return for the 2022 year.
Fringe Benefits Tax 2022 - COVID-19 & working from home
The Fringe Benefits Tax [FBT] year ended 31 March 2022.
It is now time for businesses to determine if they have an FBT exposure and if so start to collate the relevant information to complete an FBT return for the 2022 year.
It is important to note that Covid-19 has caused some impact in the FBT world this year.
There are several exemptions and concessions available for FBT purposes and working from home. We have summarised the major exemptions and concessions below.
Portable electronic devices
During the pandemic, as the government commenced and extended lockdowns, as an employer, you may have provided employees with items to allow them to work from home. Certain items that are used by employees primarily for work purposes are exempt from FBT [this means no taxing point]. These items include:
- laptops
- portable printers
- other electronic devices
In addition, the minor benefits exemption or the otherwise deductible rule may apply if:
- You allow an employee to use items they would normally use in the workplace such as a monitor, mouse, or keyboard, or
- You provide an employee with stationery or computer consumables or pay for their phone and internet access.
The minor benefits exemption may apply for minor, infrequent and irregular benefits provided under $300.
The otherwise deductible rule allows you to reduce the taxable value of benefits by the amount that your employee can claim as a deduction in their personal tax return.
Car Fringe Benefits
Generally, a car fringe benefit will arise where a car owned or leased by an employer is made available for private use by an employee. FBT obligations may be affected if employees have been garaging work cars at their homes due to Covid-19.
Work car garaged at employee’s home and not driven
Where a work car is being garaged at an employee’s home and is not being driven or is only driven as a way of maintaining the car, then the car is not being provided for the purpose of providing fringe benefits to your employee.
If the operating cost method [logbook method] is chosen to calculate the FBT on the use of the car, then there will be no FBT liability in this situation. Odometer records must be kept showing that the car has only had minor use.
If, however the statutory method [no logbook] applies in respect to the car, then an FBT liability will be incurred as the car is garaged at the employee’s home and is therefore taken to be made available for private use under this method.
Work car garaged at employee’s home and driven
If an employee uses a car for business and private purposes and uses the operating cost method to calculate FBT, then the FBT liability may be reduced by considering the business use of the car.
Where an employee has an existing logbook in place, this logbook can still be relied upon for FBT purposes despite changes in driving patterns from Covid-19. You must keep odometer records showing how much the car has been driven during the year, including any lockdown periods.
The important note here is that where driving patterns of employees have significantly changed as a result of Covid-19, and the existing logbook is no longer representative of the use of the car, then an employee can choose to complete a new logbook – even if it is not a year in which an employee is required to keep a logbook (a logbook can be used to calculate FBT for up to 5 years provided it represents the current usage of the vehicle).
Flu vaccinations for employees working from home
Flu vaccinations provided to employees are usually exempt from FBT as they are classed as work-related preventative health care. If employees who are working from home are provided with a voucher or are reimbursed for a flu vaccination, then the benefit continues to be exempt from FBT provided it is made available to all employees (even if not taken up by all employees).
Lodging FBT Returns
The 2022 Fringe Benefits financial year runs from the 1st of April, 2021 to the 31st of March, 2022. FBT returns are to be lodged by the 25 June 2022.
For more information
If you have any queries regarding the above, or for assistance in completing your FBT return, please feel free to get in touch.
We have also attached the following link for details we will require:
2022 Fringe Benefits Tax Checklist
