Fear of incurring a Fringe Benefits Tax Training (FBT) bill for many business owners has prevented them from retraining. And, reskilling their staff to perform various positions or activities within the organization.
But all that is being modified by a new exception. Announced by the government as part of last year’s Federal Budget.
If COVID-19 meant that you wanted to transform your organization. And, some of your employees’ duties. It might now be a perfect time to start reskilling your current employees with Accounts NextGen. You can solve all your problem related to tax training in Melbourne.
Education and the pressure of FBT
Traditionally, you might find yourself facing a hefty FBT bill at the end of the year. If you have training for your workers that is not adequately related to their current job.
Say that you have someone doing an administrative role at the moment. But, you decide that you want to redeploy them to a sales position. They would need to be educated in sales tactics to give them every chance of success.
As these skills not needed in their current position. This form of tax training will usually consider by the ATO to be a fringe benefit that you have offered your staff. This means that you would have to pay FBT at the 47 percent tax rate on the overall cost of their training.
Not surprisingly, for most employers, this has become a significant disincentive for retraining or upskilling their workers into new positions.
Announcement on budget
All this changed in the budget of October 2020, when the government declared. That it was exempting FBT from employer-provided retraining activities to enable employers to reskill. Their current workers for new positions within the business or perhaps outside. The corporation if they were to made obsolete because of the pandemic.
FBT-free tax training may be a valuable way to keep the employees. Within the company or to help them transition to new opportunities outside. With, the consequence of COVID-19 pushing many small companies to continue reshaping. Their business to cope with a rapidly evolving market.
The government hopes that the new opportunity would enable more Australian business owners to retrain and redeploy. Their current employees to new positions.
The exemption limits
The devil, as always, is in the specifics.
The new exemption from the FBT does not apply to retraining obtained. Through a pay packaging agreement or training offered at universities through Commonwealth-supported sites. As this is already receiving a benefit.
It also doesn’t cover repayments on student loans from the Commonwealth.
Where the new exemption is valid, training costs incurred as of 2 October 2020 obtainable claimed.
Accounts NextGen will help you to resolve all your business-related problems in Melbourne. Please consult us for more details.