The end of March signals the approach of FBT time. Employers that have not previously provided employees with fringe benefits need to be aware this year that any COVID-19 related items provided may be subject to FBT, including rapid antigen tests and protective equipment. However, this depends on the employer and employee’s unique circumstances. For the 2021-22 FBT year, 23 May 2022 is the deadline for employers to lodge returns and pay any associated liabilities.
There are circumstances in which an FBT exemption under work-related medical screening could be obtained, but that requires the testing to be carried out by a legally qualified medical practitioner or nurse and be available to all employees. However, not all employees need to be tested for the exemption to apply. It only needs to be offered to all employees, even if only some take up the offer.
Suppose your business provision or reimbursement of COVID-19 tests does not meet the criteria for exemption under work-related medical screening; FBT will need to be paid unless the minor benefits exemption or the otherwise deductible rule applies. The tests will have to be provided infrequently or irregularly for the minor benefits exemption to apply.
Other protective items provided to employees while at work, such as gloves, masks, sanitisers, and anti-bacterial spray, are most likely to be exempt from FBT under the emergency assistance exemption, provided they are given to employees who have physical contact or are close to customers or clients while carrying out their duties or those involved in cleaning premises.
In other cases, where an employee’s specific employment duties do not involve physical contact with customers or cleaning, the minor benefits exemption could be applied, so no FBT is incurred. Again, the benefit must be minor, infrequent and irregular, and under $300.
Where a travelling employee was required to self-isolate or quarantine, the costs related to that paid for by the business may not be subject to FBT under the emergency assistance exemption. These and many other COVID-19 specific benefits – such as rewarding employees for getting boosters – and associated exemptions highlight the complexity of the 2022 FBT return for businesses.
Need help?
If you run a business and have provided your employees with COVID-19 related items, we can help you work out whether they are subject to FBT and, if so, whether various exemptions can reduce the FBT. Contact us today at enquiries.rm.net.au to take all the hassle out of FBT time.
**The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
