FBT 2014 WHAT S NEW FOR FBT IN

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1 WHAT S NEW FOR FBT IN Introduction Game changing developments with the log book method in Former Government back flip on the Operating cost method ATO confirms FBT sting with employees who share a company car in a log book year New ATO guidelines relax the record-keeping rules for car log books Recent decision highlights FBT minefield with cars being used for private purposes ATO decision highlights FBT pitfalls with employees using company cars for a second job New developments with cars under the Statutory formula method New developments provide unexpected FBT windfall for cars parked at airport car parks FBT minefield with novated leases that include lease protection insurance FBT sting associated with employers who provide personalised number plates Recent decision confirms that structural improvements can create an FBT-exempt car Latest developments with living-away-from-home benefits in What are the changes that have been made to certain LAFH-based benefits Detailed NTAA guide on when the new rules apply to employers providing LAFH-based benefits AAT decision highlights FBT trap with paying LAFHAs under an industrial agreement Recent decision highlights FBT traps with employers paying employee visa costs ATO back flip provides unexpected FBT windfall for the food component of a LAFHA ATO unveils new guidelines with the car parking benefit rules Identifying when a car parking benefit arises S.39A Using the average cost method to value a car parking fringe benefit the background ATO highlights the dangers of using the average cost method for cars parked at different locations National Tax & Accountants Association Ltd: February March 2014 i

2 5. New rules create compliance nightmare for employers providing ipads, Tablets, etc Dangers for portable electronic devices primarily used for work-related selfeducation purposes Providing multiple items to an employee in the same FBT year the substantially identical functions test Dealing with accessories, upgrades and extended warranties for portable electronic devices New developments create FBT minefield for employers providing in-house benefits NEW rules overhaul the FBT concessions associated with in-house benefits ATO confirms FBT problem for employers who sell goods on the Internet Other FBT developments in the 2014 FBT year New ATO guidelines create an FBT disaster for salary packaging business expenses New FBT reforms for airline transport fringe benefits ATO clarifies the FBT dangers for retail employers who provide gift cards to employees ATO audit hot spots for FBT in FBT rates and thresholds for 2014 FBT year MEAL ENTERTAINMENT NO MESS, NO FUSS AND NO MISTAKES IN Introduction The fundamentals of entertainment meal entertainment and recreation When is food and drink considered to be meal entertainment? Comprehensive meal entertainment checklist Understanding the entertainment valuation methods Identifying what valuation methods are available Guide to using the actual method The FBT, GST and income tax implications of using the actual method The FBT exemptions under the actual method When can the minor benefit exemption be claimed? Entertainment table under the actual method ii National Tax & Accountants Association Ltd: February March 2014

3 4. Guide to using the 50/50 split method The FBT, GST and income tax implications of valuing meal entertainment using the 50/50 split method Entertainment table under the 50/50 split method Reporting guide for 2014 entertainment Christmas parties and EOFY celebrations NTAA guide to dealing with function-related expenses Commonly asked questions with respect to Christmas and EOFY function expenses Entertainment provided by a third party The arranger provisions Commonly asked questions with respect to third party entertainment benefits Conferences and weekend retreats Correct classification of conference expenses Implications of conferences and weekend retreats Tax-exempt employers and entertainment What is a tax-exempt employer? Implications of providing a tax-exempt body entertainment fringe benefit Commonly asked questions with respect to tax-exempt body entertainment fringe benefits CAR FRINGE BENEFITS THE BIGGEST COST, THE BIGGEST RISK! Introduction When does a car fringe benefit arise? What is a 'car' for FBT purposes? When is a car 'held' by the provider (usually the employer)? The car is either 'applied', or 'deemed' to be available, for private use Common questions with determining whether a car fringe benefit arises Summary of circumstances where car fringe benefit rules don t apply Statutory formula method under the ATO s audit microscope in How is the taxable value calculated under the Statutory formula method? Base value of a car National Tax & Accountants Association Ltd: February March 2014 iii

4 2.3 Statutory fraction Number of days available for private use Recipient s payments An essential guide to the Operating cost ( log book ) method avoid costly mistakes Electing to use the Operating cost method Operating costs Component C Business use percentage Component BP How to identify if a car fringe benefit is a Type 1 or Type 2 benefit Summary table for classifying car fringe benefits Cutting edge FBT planning strategies with cars literally save $ 000s Massive savings where an employee sells their car to a finance company and then salary packages it ATO ruling confirms that employers can apply the minor benefit exemption for car benefits ATO gives the green light to employee trade-ins that drastically reduce an employer s FBT bill! Choosing between the Operating cost and Statutory formula methods an NTAA guide Methodology and assumptions Table results for cars valued at between $30,000 to $80, SALARY PACKAGING AND FBT PLANNING TECHNIQUES Nuts and Bolts of salary packaging What is the maximum amount that an employee can salary package? Establishing an effective salary sacrifice agreement NTAA guide to the essential clauses that should be contained in all salary sacrifice agreements A state-by-state guide on how salary packaging affects payroll tax and Workcover Salary packaging techniques for employees earning less than $80, Salary packaging car fringe benefits for employees earning less than $80, Packaging into superannuation for employees earning less than $80, Savings for employees of hospitals, charities and sporting clubs earning less than $80, iv National Tax & Accountants Association Ltd: February March 2014

5 3. Salary packaging techniques for high income earners Salary packaging into super for executives Salary packaging meal entertainment Salary packaging and associate leases AN ESSENTIAL GUIDE TO TRAVEL, LAFH AND RELOCATION Introduction When is an employee travelling on work? Factors to consider in deciding if an employee is travelling on work FBT documentation and declaration requirements for business travel When is an employee LAFH for work? When was an employee considered to be LAFH under the old rules (i.e., pre-1 October 2012)? When is an employee considered to be LAFH under the new rules that apply from 1 October 2012? When has an employee relocated? Factors that indicate an employee has relocated Establishing a tax effective package for employees who are LAFH or relocating What benefits should an employee who is LAFH package? What types of benefits should an employee who has relocated package? CAR PARKING BENEFITS DEMYSTIFIED! Introduction When does the provision of a parking space give rise to a car parking benefit? When is a CPFB exempt from FBT? Calculating the taxable value of CPFBs Step 1 Calculate number of car parking benefits provided Step 2 Calculating the taxable value of each benefit Record keeping requirements for CPFBs Notes National Tax & Accountants Association Ltd: February March 2014 v