In: Accounting
William is James’ employer. William paid the following payments on behalf of James. Item Payment by William Tax deduction had James paid $ $ Computer part 300 300 University fees 450 200 HELP charges 850 Nil Taxi fares 300 100 Required: Calculate is the taxable value for FBT purposes of the following payments. You must refer to relevant legislation and/or case law in your answer.
While calculating the taxable value of FBT, we should consider each benefit given by william to James :
1. Computer Parts : Work related items are exempt from FBT like Computer, laptop etc. But here William gave Computer parts to James for his personal interest, hence it is taxable.
2. University Fees : Educational benefits are covered under non - taxable benefits, so University fees is exempt for FBT.
3. Help Charges : As per its name it seems to be covered under emergency assistance. Any emergency assistance provided by employer is exempt from FBT if it is in the nature of :
4. Taxi fares : Any benefit arising from taxi travel by an employee is exempt from fringe benefits tax (FBT) if the travel is a single trip beginning or ending at the employee's place of work.
"Any benefit arising from taxi travel by an employee is also an exempt benefit if both of the following apply:
Assuming that the above conditions are satisfied, taxi fares are exempt for James.
Calculation of taxable value under FBT :
Computer Parts $ 300
University Fees NIL
HELP charges NIL
Taxi Fare NIL
Taxable Value $300