Below, we provide answers to some questions arising where COVID-19 meets FBT.
The unique times we find ourselves in will hopefully be a once in a lifetime experience for most of us. Unfortunately, as employers, FBT will not be a once in a lifetime experience for you!
For example, there is a high probability your employees will be reading this months newsletter edition from a desk in their home and this prompts the query as to whether an employee working form home raises and specific FBT issues.
The ATO are aware that a large portion of the Australian work force are out of work, working from home or somehow otherwise affected by the current COVID-19 pandemic. As such, they have addressed some FBT related queries that have been raised by employers. This article highlights those queries and the ATO’s response.
| QUESTION | ANSWER |
| I am a not-for-profit employer and I provide salary-packaged meal entertainment to my employees. Can my employees use their exempt (or rebatable) cap during the FBT year ending 31 March 2021 given restaurants and public venues are currently closed due to COVID-19?
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Whether the provision of meals qualifies as salary-packaged meal entertainment depends on the particular facts and circumstances of the meal and how it is provided. Given the unprecedented circumstances currently existing, for the FBT year ending 31 March 2021, we will not apply any compliance resources to scrutinising expenditure under these arrangements provided the meals are provided by a supplier that was authorised as a meal entertainment provider as at 1 March 2020.
We also confirm that for the FBT year ended 31 March 2020, we will not apply any compliance resources to scrutinising expenditure under these arrangements during the period where restaurants and public venues were closed.
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| Will I need to pay FBT if I provide an employee with items to allow them to work from home due to COVID-19?
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If you provide your employees with a laptop and a portable printer or other portable electronic devices to enable them to work from home or from another location due to COVID-19, these will usually be exempt from FBT if they are primarily used for your employee’s employment.
If you allow your employee to use a monitor, mouse or keyboard they otherwise use in the workplace, or if you provide them with stationery or computer consumables or pay for their phone and internet access, the minor benefits exemption or the otherwise deductible rule may apply. The minor benefits exemption may apply for minor, infrequent and irregular benefits of less than $300. The otherwise deductible rule allows you to reduce the taxable value of benefits by the amount for which your employee would be able to claim a once-only deduction.
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| Will I need to pay FBT if I provide an employee affected by COVID-19 with emergency accommodation, food, transport or other assistance?
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No, so long as both of the following apply:
· The benefit given to your employee is emergency assistance to provide immediate relief. · That employee is at risk of being adversely affected by COVID-19. In the context of COVID-19, we will accept that the FBT emergency assistance exemption applies if you, as an employer, have provided emergency accommodation, food, transport or other assistance to an affected employee. Exempt assistance would cover, for example: · expenses incurred relocating an affected employee due to COVID-19, including paying for flights for overseas to return to Australia · expenses incurred providing food and temporary accommodation if an affected employee is unable to travel due to travel restrictions (including domestic, interstate or intrastate travel) · benefits provided that allow the affected employee to self-isolate or be quarantined · transporting or paying for an affected employee’s transport expenses including car hire and transport to temporary accommodation.
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| My employees work on a fly-in fly-out and a drive-in drive-out basis. With the travel restrictions arising from COVID-19, some are not able to return to their normal residence on the days they aren’t working. I’m paying for their temporary accommodation and meals while they can’t return home. Do I have to pay FBT for the accommodation and meals I am providing?
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No, you won’t have to pay FBT for the temporary accommodation and meals provided to your employees who are unable to return to their normal residence due to domestic and international travel restrictions in response to COVID-19. These benefits are considered emergency assistance and are exempt from FBT.
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| If I give my employees gloves, face masks, sanitisers and anti-bacterial spray to protect them from contracting COVID-19 while at work, do I need to pay FBT on these benefits?
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It depends. These benefits will be exempt from FBT under the emergency assistance exemption if you provide them to your employees to carry out their duties that require them to have physical contact or be in close proximity to customers or clients while carrying out their duties or they are involved in cleaning premises.
Examples of this type of work include the: · medical industry (such as doctors, nurses, dentists and allied health workers) · cleaning industry · airline industry · hairdressing and beautician industry · retail, café and restaurant industry. If your employees’ specific employment duties are not of the kind described above, the minor benefits exemption may apply if you provide an employee with minor, infrequent and irregular benefits of less than $300.
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| Will I need to pay FBT if I provide emergency health care to an employee affected by COVID-19?
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Exemption from FBT for emergency health care is limited. The exemption 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. However, if you pay for transporting your employee from the workplace to seek medical assistance, the cost is exempt from FBT. |
We trust this table serves as a handy reference tool for those of you. Remember, you can also submit your COVID-19 FBT queries to us via your Q&A portal.
This article provides a general summary of the subject covered and cannot be relied upon in relation to any specific instance. It is not intended to be, nor should it be relied upon as, a substitute for professional advice. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use.