What is FBT and how does it affect my business?

FBT stands for Fringe Benefits Tax and it is a tax on employers who provide certain non-cash benefits to their employees (and relatives of their employees). This tax was probably introduced many years ago to deter employers from giving their employees excessive perks which was previously not shown on their tax returns.

Common fringe benefits provided to employees are:

• Use of cars owned by the business for private purposes
• Providing entertainment such as food and drink (including a Christmas party)
• Giving employees stock or other goods for free or at a discount
• Providing employees and their families with housing or accommodation
• Giving employees free loans or with lower interest rates.

There are many more benefits listed in the legislation but the above are the most common. If you employ people in your business and think that any of the above might apply then please contact me to see what we can do to minimise or avoid paying this tax which is currently set at a nasty 46.5%!