Fringe Benefits Tax 2019
It is very important that you actively determine whether or not you have incurred an FBT liability during the FBT year.
The FBT year ends on 31 March 2019 and is an area of focus for the Australian Taxation Office (ATO). FBT is payable by employers when certain benefits are provided to employees in addition to salary or wages. If you have provided benefits during the year such as a car, entertainment, paid expenses for employees or provided them with a paid car space, then you probably need to lodge an FBT return. Even in the event that the total FBT liability is zero because employees make contributions, you should still consider lodging an FBT return.
Lodging a nil return means that should the ATO decide to review your FBT liability the period of review will generally be restricted to three years. If your business does not lodge an FBT return then there could be no time limit.
Most employers who provide fringe benefits to employees during the course of the year need to register and pay FBT. If your business is not yet registered for FBT, the due date for registration is 21 May 2019, with any payment due by 28 May 2019. Electronic FBT returns can be lodged up to 25 June 2019. GST is payable on any employee contributions to the FBT liability so FBT should be addressed as part of your March BAS preparation.
What you need to do
The questionnaire will help determine if your business has incurred an FBT liability. Please click HERE for questionnaire.
Please complete the questionnaire and sign where indicated. Once completed, please return the signed questionnaire (and if applicable, the relevant schedule) to us by email to firstname.lastname@example.org or by post to PO Box 6106 Baulkham Hills NSW 2153 by 15 April 2019.
Contact us for assistance by phone on 8848 3000 or by email to email@example.com.
If you answered 'yes' to any of the questions, you will also need to complete the relevant schedule. We may need to register your business for FBT and/or complete an FBT Return for the 2018-19 FBT year if there is a potential FBT liability payable for the year.
If you answered 'no' to all of the questions, you can either email or post back the completed questionnaire or email us to advise that you have reviewed the questionnaire and none of the questions were applicable to your business. We simply need to ensure that there is evidence that your situation has been reviewed and there is certainty that your business has not incurred an FBT liability.
Are you liable for FBT?
If you are not sure whether your business is providing fringe benefits to employees, here are some key questions you should ask yourself:
A common area of confusion is motor vehicles. Where a motor vehicle owned or leased by the business is used by an employee or director for private purposes (including travelling between home and work), then FBT is an issue that needs to be managed.
- Do you make vehicles owned or leased by the business available to employees for private use?
- Does your business provide loans at reduced interest rates to employees?
- Has your business forgiven any debts owed by employees?
- Has your business paid for, or reimbursed, an employee's private expenses?
- Does your business provide accommodation to your employees, i.e., a house or unit?
- Does your business provide employees with living-away-from-home allowances?
- Does your business provide entertainment - food, drink or recreation activities? For example, if you had a Christmas party then the business probably provided entertainment to employees.
- Do any employees have a salary package (salary sacrifice) arrangement in place?
- Has your business provided employees with goods at a lower price than they are normally sold to the public?
Another common area of confusion is entertainment. Entertainment can be almost anything from food, drink, recreation activities such as movie tickets, through to non-work based travel. If you provided any entertainment benefits to employees, such as an employee attending a business lunch or party, then FBT may apply. Entertainment is an area of continued focus for the ATO as the FBT treatment also interacts with the treatment of these expenses for income tax and GST purposes.
What's exempt from FBT?
Certain benefits are excluded from the scope of the FBT rules. The following work-related items are exempt from FBT if they are provided primarily for use in the employee's employment:
- Portable electronic devices (e.g., laptop, iPad, GPS, etc.,) that are provided primarily for use in the employee's employment (larger businesses are limited to the purchase or reimbursement of one portable electronic device for each employee per FBT year);
- An item of computer software;
- Protective clothing required for the employee's job;
- A briefcase;
- A calculator;
- A 'tool of trade'.
The next steps
If you need to register for FBT for the first time, we will complete this process for you and call you to talk through your obligations once you are registered.
If we can assist you with any information or queries you might have about FBT or determining if your business is liable for FBT, please call us on 8848 3000 or e-mail us at firstname.lastname@example.org. Please click HERE for further details on FBT.