Under COVID-19, providing certain benefits deemed not taxable

The ATO has been asked pertinent questions from both taxpayers and practitioners about some salient conundrums that have arisen due to the current COVID-19 employment environment. These may apply to a wide sample of taxpayers.

Some queries have related to fringe benefits tax (FBT) and the supply of items from an employer to staff to allow employees to undertake work from home (such as a laptop, other devices, or a printer), with another circumstance being an employer that provides accommodation, food and transport to affected staff.

The advice from the ATO is as follows.

Workplace items
If employees are provided with a laptop and a portable printer or other portable electronic devices to enable them to work from home or from another location due to COVID-19, these will usually be exempt from FBT if they are primarily used for the employee’s employment.

If an employer allows their employee to use a monitor, mouse or keyboard they otherwise use in the workplace, or if they provide them with stationery or computer consumables or pay for their phone and internet access, the minor benefits exemption or the otherwise deductible rule may apply.

The minor benefits exemption may apply for minor, infrequent and irregular benefits of less than $300. The otherwise deductible rule allows an employer to reduce the taxable value of benefits by the amount for which an employee would be able to claim a once-only deduction.

Accommodation, food, transport
For an employee adversely affected by COVID-19 and who is provided by an employer with emergency accommodation, food, transport or other assistance, the ATO says FBT would not apply as long as:

  • the benefit given to the employee is emergency assistance to provide immediate relief
  • that employee is, or is at risk of being, adversely affected by COVID-19.

In the context of COVID-19, the ATO says it will accept that the FBT emergency assistance exemption applies if an employer has provided emergency accommodation, food, transport or other assistance to an affected employee.

Exempt assistance would cover, for example:

  • expenses incurred relocating an affected employee due to COVID-19, including paying for flights
  • expenses incurred providing food and temporary accommodation if an affected employee is unable to travel due to travel restrictions (including domestic, interstate or intrastate travel)
  • benefits provided that allow the affected employee to self-isolate or be quarantined
  • transporting or paying for an affected employee’s transport expenses including car hire and transport to temporary accommodation.

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