As the end of the year approaches, now is a good time to talk to your employer clients about their plans for any lunches, end-of-year celebrations, team building activities and gifts for their employees.
While these arrangements can boost morale and reward employees, they may not realise that some of these benefits can attract fringe benefits tax (FBT).
Hangover prevention
Discussing festive season plans before arrangements are finalised and expenses incurred, helps your clients understand their FBT obligations and what records they need to keep.
Start the conversation now
Encourage your employer clients to think about:
- where the event will be held – on business premises or offsite
- when the event will be held – during or outside normal working hours
- the type of attendees – including employees and their associates (such as partners or family members), contractors, business clients and customers, or a combination of these groups
- the cost per person – for food, drinks, entertainment and associated expenses
- the value and type of any gifts provided.
The answers to these questions may determine whether FBT applies and whether any exemptions or concessions, such as the minor benefits exemption, are available. Advising employer clients to consider these factors early can help them make informed decisions and avoid unexpected FBT outcomes.