Question
Volunteer workers of our organisation are invited to functions throughout the year. Tickets to these functions are available for sale to the general public. One of the benefits of these functions includes attending a lunch and watching the football with the CEO and other senior members of our organisation. The volunteers are also able to invite additional guests to attend the function with them. Is this benefit subject to FBT?
Answer
The FBT legislation extends the definition of ’employee’ to include a person who receives non-cash benefits which, if paid in cash, would have been salary or wages.
The general effect of section 137 of the FBT Act is that such a person will be an employee for the purposes of the FBT Act where, if any benefit had been in the form of cash, that cash would have been salary or wages and that person would have been an employee.
The threshold dollar value of benefits where this anti-avoidance provision ‘kicks in’ lies is not set in concrete. Where the benefits are infrequent/irregular and not of significant value in total over the FBT year, one would expect the provision would not be invoked by the ATO.