Avoid an FBT hangover this festive season

As the end of the year approaches, now is a good time to think about your plans for any lunches, end-of-year celebrations, team building activities and employee gifts.

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 you understand your FBT obligations and what records you need to keep.

Start the conversation now

Employers need 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.

If you have any questions, then please speak to us. It is important that you avoid unexpected FBT outcomes.

Australian Taxation Office (ATO)