FBT: What’s new for 2017?

Electronic devices - FBT Exempt

Its coming up to that time of year again, the end of the Fringe Benefits Tax (FBT) year. It may be the least exciting of the of our ‘New Years’ that we celebrate, but lets have a look at whats new this FBT Year.

The Rate

The biggest impact to FBT, which carries over from the previous FBT year, is the continued application of a 49% rate. This is due to revert to 47% on April 1, 2017 (therefore applying for the 2017-18 FBT year onwards), but for the current FBT year, 49% continues to apply.

Electronic devices

**This is a good change, and the most interesting**

One notable change is to the FBT treatment of portable electronic devices. Previously, the FBT exemption applied generally to only one work-related device per employee per FBT year. Unless this device was lost, stolen or destroyed, any subsequent devices (especially if they provided similar functions) were subject to FBT.

For the 2017 year (that is, from April 1, 2016), this limit of one has been lifted. Now, employees can be provided with multiple electronic devices, which will also be FBT exempt, regardless of whether these have substantially similar functions. Note however that the “work-related use” requirement still applies.

Meal entertainment

A single grossed-up cap of $5,000 applies to any salary packaged meal entertainment (and entertainment facility leasing expenses) for the 2017 FBT year. This sort of benefit can be provided through, for example, the use of a meal card in the case of the former, or the use of a sporting corporate box for the latter. Exceeding the cap will see FBT applied. The 50/50 method and 12-week register has also not been available from April 1, 2016.

Vehicle rates

The cents per kilometre rates for vehicles other than cars has increased. The rate of 52c applies for an engine capacity up to 2,500cc. Above that capacity the rate is 63c, and for motorbikes it is 16c.

LAFHA food and drink

And the living away from home allowance (LAFHA) reasonable food and drink amounts have increased. For the FBT year ending March 31, 2017, the weekly amounts are:

One adult $242
Two adults $363
Three adults $484
One adult and one child $303
Two adults and one child $424
Two adults and two children $485
Two adults and three children $546
Three adults and one child $545
Three adults and two children $606
Four adults $605

These amounts are for the total of food or drink expenses and include any amounts that may have been allowed for home consumption.

Car parking

A car parking fringe benefit arises on a day when car parking is provided in respect of employment (generally for more than 4 hours) where the commercial car park charges a representative fee of more than the daily fee threshold (as determined by the ATO) at the beginning of the FBT year.

Car parking daily fee thresholds are adjusted annually, and for the FBT year ending in March this year have been determined at $8.48. This is arrived at by applying CPI to the previous year’s threshold.

Non-remote housing values

The indexation factors for valuing non-remote housing has also increased. For the 2016-17 FBT year, they are:

New South Wales 1.025
Victoria 1.022
Queensland 1.013
South Australia 1.016
Western Australia 0.988
Tasmania 1.010
Northern Territory 0.997
Australian Capital Territory 0.978

 

Note for next year

Note also that from July 1, 2017, the way fringe benefits will be treated for the calculation of several tax offsets will change. The meaning of adjusted fringe benefits total has been modified so that the gross rather than the adjusted net value of reportable fringe benefits is used. Adjusted fringe benefits total is used to calculate entitlements for the low income superannuation tax offset, the seniors and pensioners tax offset, the net medical expenses tax offset and the dependent tax offsets.

Author David McKellar

David McKellar is a Chartered Accountant and Director of Allied Business Accountants, an accounting firm specialising in providing strategic advice and taxation services to business owners, investors and Self Managed Superannuation Funds.

More posts by David McKellar