FBT
There are some employers who unwittingly get into trouble with the FBT because they do not correctly interpret the infrequent and minor exemptions that are provided for all benefits of $300 or less. The main area of concern for these employers is when they get into trouble when applying for infrequent and minor exemptions in regards to the ‘Meal Entertainment’ provision. 
The Meal Entertainment provision is primarily used for drink or food by employees who do not consume it on the business premise of the employer. An exemption of less than $300 per person for drink and food can be used if it is only used once in a while throughout the year.
Knowing if a benefit for Meal Entertainment is valid can simply be done by looking at the receipt of either food or drink. However, some employers get into hot water by not checking if the infrequency of the benefit satisfies all conditions.
It is highly recommended, as a rule of thumb, to only allow benefits for Meal Entertainment at a maximum of 10 times during any FBT year. Any benefits that exceed 10 times will then be subject to any of the FBT regulations.
Please keep in mind that Meal Entertainment includes an employer inviting an employee outside of the office for a coffee. However, be careful because if you decide to do this on a regular basis throughout the year, the employee may exceed FBT regulations and be responsible for all Meal Entertainment benefits. This would also include social functions at the end of the year. It is also important to keep a proper register of all benefits that the employee is receiving otherwise they could become subject to FBT.
This year, ATO has implied that there will be an increased focus on FBT regulations and therefore it is important to make sure that your company is compliant. It is also important to contact your firm’s advisor at Success Accounting Group. Please do this as soon as possible.
Questions?
The ATO has signalled that there will be an increased focus on FBT this year so if you would like to limit the ATO’s ability to retrospectively launch an audit please contact your advisor on (03) 9583 0550 or email us for assistance.
About Lan Nguyen
Lan is the Founder and Chief Strategist at Success Accounting Group, Melbourne based CA firm. In a matter of short 8 years she has built up a reputable Chartered accounting firm with 3 offices and a team of 6 professional accountants and support team members. Her mission is to provide Innovative and Strategic Financial advice to help her customers make smarter financial decisions today for a brighter future.
Success Accounting Group is for established business owners who would like help to grow a sustained business. As a business owner you understand what drives your business success with our accounting team taking care of the rest.
Success and Wealth
Success Accounting Group Pty Ltd
Oakleigh, VIC, 3166
