When we hear the words "Fringe Benefits", many of us think only of motor vehicles, or as the festive season approaches, about the tax implications of the Office Christmas party. However, fringe benefits extend to many more areas, and probably ones you've never considered. As 2016 ends, and you start to wind down and think about celebrating, it might be worth considering the other fringe benefits you may be providing, and planning for the reporting requirements necessary for 31 March 2017.

Fringe Benefit Tax (FBT) audits by the ATO are on the increase. Particular attention is being given to payments made to, or expenses paid on behalf of, employees. Three areas being highlighted in recent times are:

Travel - this is of particular concern where spouses, or entire families, are travelling and only certain family members are travelling for business purposes.

Meals - Excessive food costs where it appears that businesses are paying for private grocery bills, rather than simple meal expenses.

Expense Payments - Where expenses seem unusually high (eg: employees' personal telephone bills).

Other types of benefits that may be of concern include:   

Work Parties & Gifts – The end of year festivities must, of course, rate a mention. So before you start ordering the platters, popping the champagne or wrapping gifts for your staff, you might want to take a minute to consider your entertainment fringe benefit liability.  For more information, why not revisit last year's blog at http://www.kdagroup.com.au/blog/christmas-considerations or the ATO for a more comprehensive guide.

Accommodation & Meals - If you provide an employee with accommodation rent free, or at a reduced rate at their regular residence, a housing fringe benefit may arise . A board fringe benefit may also arise if you provide your employee with accommodation and there is an entitlement to at least two meals a day. (Eg: a remote construction site or resident boarding school teachers).

Employee Expenses – From time to time you might reimburse an employee, or a third party regarding an employee, for expenses they've incurred. These may be business or private in nature, or a combination of the two. An expense payment fringe benefit may arise as a result.

Low or No Interest Loans – You also provide a loan fringe benefit if you give your employee a loan and charge no interest, or a rate of interest that is lower than the benchmark interest rate (5.65% for 2017).

Living Away from Home - Occasionally, an employee may be required to live away from home for a period of time to perform their work duties, and a living-away-from-home allowance (LAFHA) fringe benefit may arise if you pay an allowance to cover additional costs.

Forgiving an Employee's Debt - Sometimes you decide, or a sense of benevolence urges you, to waive or forgive the whole or part of an employee's debt. For example, if you sold goods to an employee and later told them not to bother about paying the invoiced amount. A debt waiver fringe benefit arises as a result. (NB: This does not apply if you write off the outstanding amount as a bad debt.)

Property and your Employee - Providing your employee with property of any kind, whether free or at a discount may also give rise to a property fringe benefit . Property isn't limited simply to buildings, as it may cover household items or equipment as well as shares or bonds.

Parking a Car - Car fringe benefits are a fairly common expense in many businesses. However, a separate car parking fringe benefit may also apply if your employees park at your business premises for more than four hours during the work day, if they travel between work and home at least once, if there is a commercial parking station within one kilometre of your premises and its all-day fee is more than the car parking threshold ($8.48 for 2017).

Anything Else? - Finally, just in case you thought we've covered everything, there is even provision for those things that don't fit into any of the above. For example, if you offer the use of employer property, or the provision of professional services (eg: a solicitor), or private use of a company truck or utility you may still be subject to a residual fringe benefit .

For more information go to  https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/Types-of-fringe-benefits

So as 2016 draws to a close, and you look forward to the endless possibilities that 2017 might bring, put FBT on your agenda and remember that 31 March will be here much sooner than you think.