There has been a recent attempt to stamp out abuses of LAFHA benefits (such as employees converting taxable salary and wages into tax-free LAFH benefits that exceeded actual costs incurred by an employee whilst away from home).
For example, additional conditions have been imposed that must be satisfied before LAFHA benefits qualify for concessional Fringe Benefits Tax (FBT) treatment. As such, this is likely to increase employers’ FBT liability which will probably mean that employers will need to adjust salary packages of staff who receive LAFHA benefits.
Do note that an employee is considered to be LAFH where the employee is ‘required’ to live away from his or her normal residence in order to perform employment duties.
This may even be the case where the employer does not actually require the employee to change their usual place of residence but the duties of the employee are such that there is an implied requirement to change their usual place of residence.
Such factors that might show this would include the distance between the employee’s usual place of residence and their new place of employment. However, it always depends on the facts of the case.
Should you have any more enquiries in relation to the above or otherwise, get advice first from our accountants and tax agents at The Quinn Group. Call us today on 02 9223 9166 or submit an online enquiry.