General advice disclaimer General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.
Government extends the FBT exemptions for portable electronic devices for small business employers
In the 2015/2016 Federal Budget, the Federal Government announced that it would extend the FBT exemption for portable electronic devices (for example laptop computers and mobile phones) to allow small business employers to provide more than once ‘portable electronic device’ to an employee in the one FBT year. This extension of the FBT exemption for portable electronic devices for small business employers applies from 1April 2016 (i.e., the 2017 FBT year onwards).
Under the new rules, the substantially identical function limitation will not apply for small business entity (‘SBE’) employers who provide more than one work-related portable electronic device to an employee, in the same FBT year, without attracting any FBT (assuming the device is actually used primarily for use in the employee’s employment).
One important aspect of the changes to the FBT-exemption for portable electronic devices that appears to have been overlooked is that the extended exemption applies regardless of whether or not the device is provided under a salary packaging arrangement. In other words, the extended FBT exemption for portable electronic devise is effectively a blanket exemption, meaning that employees of SBE employers are now entitled to salary package an unlimited number of portable electronic devices and allow the employer to claim the FBT exemption. However, any employees considering salary packaging multiple devices must be able to demonstrate that each device is being used ‘primarily’ in their employment.
It is expected that the ATO will closely scrutinise any arrangement under which an employee salary packages multiple portable electronic devices in the one FBT year, to establish whether the device were to be used primarily in their employment or whether they were being used for other private purposes (e.g., by children of the employee for school-related purposes.
Source: NTAA Edition No:227