In the run up to the end of the FBT year, the ATO reminds employers that a fringe benefit may be provided by another person on behalf of an employer, but may also be provided to another person on behalf of an employee (for example, a relative).
As far as “entertainment” goes, the ATO says such benefits include providing:
Recreation includes amusement, sport and similar leisure-time pursuits and includes recreation and amusement in vehicles, vessels or aircraft (for example, joy flights, sightseeing tours, harbour cruises).
Some examples of the provision of entertainment are:
No such category
The ATO says however that there is no FBT category of “entertainment fringe benefit” as such. Instead, the provision of entertainment may give rise to a number of different types of fringe benefit, depending on the circumstances under which you provide the entertainment.
The different types of fringe benefit that may arise are:
Exemptions to FBT
Apart from the “minor benefits exemption” (generally where the value is less than $300), there is an exemption that applies to providing food and drink in the following circumstances.
Food and/or drink provided to, and consumed by, current employees on the business premises on a working day are exempt property benefits (refer to section 20.6 of Fringe benefits tax exempt benefits). The exemption from FBT applies regardless of whether:
Food and/or drink provided on business premises to associates of employees (for example, spouses) is not exempt from FBT. Where food and/or drink is provided on the same occasion to both employees and their associates, there may have to be an apportionment of the expenditure on a per head basis.
This exemption does not apply to:
A relatively recent ATO webinar, provides advice on FBT and entertainment to employers and small business owners. It covers: