Sinclair is also concerned about the income tax and FBT compliance for his staff. In particular, Sinclair employs one person, Que, who has been provided with the following items by the business:

• Wages of $80,000 per annum, paid directly to his partners account.
• Lump Sum Bonus of $5,000 where the business meets or exceeds turnover.
• Travel allowance of $60 per month to cover public transport costs to project sites.
• Mobile phone, valued at $1,300, for use whilst on site.
• Monthly phone bills are paid by the business.

The business also provides staff with tea and coffee facilities each day and plans to provide an annual Christmas or birthday gift up to $150 in value each.

Required:

Advise Sinclair of the tax consequences of the above employment provisions by answering the following question set. Ensure you make reference to appropriate sources of tax law. No calculations are required.

Explain the FBT consequences for the additional items provided by the business to its staff?