FBT – Christmas Parties and Taxi Fare/Rideshare
Some employers, who are commendably anxious to protect their employees and clients from the drink/driving laws, also pay for taxis/rideshare to and from the place of entertainment.
.
For FBT purposes there may be different consequences for payment of the taxi fare. For clients, the taxi fare is considered to be part of the entertainment expense and no deduction is allowable. For employees, if the fare is for travel from home to the place of entertainment (not being their place of employment) and return home again, the benefit is considered to be for the facilitation of entertainment and is not a separate benefit from the entertainment itself.
The result is that the employer would then have to rely on the total entertainment package being under $300 for the minor benefit rule to apply.
However, if the Christmas function is held on the employer’s premises, the taxi trip is FBT exempt if it is a single trip beginning or ending at the employer’s premises. For example, the exemption would apply if the employee went from the workplace to home, or any other place.
However, the exemption would not apply if the trip was broken and continued at some other time. For example, the employee gets a taxi from the workplace and goes out to a nightclub; that trip is deductible and exempt from FBT. If the employee later gets another cab to home, that leg of the trip would be deductible to the employer but FBT would be payable.
Note however, that if the employer is using the 50/50 split method of calculating FBT and deductions, the taxi travel would always be included in the cost of entertainment, and there would be no exempt journey for travel from the workplace to home.
Uber and other ride sharing services are now also included for FBT exemption as taxi services, after recent changes to the FBT Act, from 1st April 2019.
Acctweb
Hot Issues
- Estate planning considerations
- 5 checklists to support your business
- Are you receiving Personal Services Income?
- What Employment Contracts Does My Small Business Need?
- The superannuation changes from 1 July
- Hasty lodgers twice as likely to make mistakes, ATO warns
- Landlords who ‘double dip’, fudge deductions in ATO crosshairs
- Most Spoken Languages in the World
- Tax Time Checklists - Individuals; Company; Trust; Partnership; and Super Funds
- Compare your business
- 2024 Year End Tax Planning Guide (Part 2)
- ATO to crack down on rental income, WFH deductions this tax time
- How to Draft a Standard Form Contract
- GST, PAYG withholding a ‘significant portion’ of $50bn tax debt
- ATO changes will make it harder for over 42,000 small businesses.
- The Deadliest pandemics in History
- Budget breakdown – Federal Government Analysis
- Federal Budget 2024
- Winners & Losers
- 2024 Year End Tax Planning Guide (Part 1)
- Medicare levy surcharge OR basic health insurance ?
- ATO warns of ‘serious penalties’ for unlawful tax scheme promoters
- ACCC scam report
- Employees taking more sick days - and it's getting worse
- Foreign residents selling property in Australia
- How much does negative gearing really cost – an overview and an opinion?
- The Shortest-reigning Monarchs in History
- FBT Reminder – Odometer Reading
Article archive
- April - June 2024
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014