Fringe Benefits Tax a year ends on 31 March. The ATO has a responsibility to examine whether every employee is paying FBT and the amount payable is right.
In order to meet the fringe benefits obligations, we have maintained the list of each and every employee needs for the sake of knowing FBT reviews of all the years such as:-
- Is it necessary to register for FBT?
- Information necessary to provide to the accountant
- What should be exempted for FBT?
- How FBT liabilities can be reduced?
- Are the minor or infrequent benefits paid to the employees?
- Is it necessary for us to examine salary sacrifice agreements?
IS IT NECESSARY FOR YOU TO REGISTER FOR FBT?
If you generally offer cars, car parking, entertainment (food and drink), employee discounts, reimburse private expenses, etc to your employees and directors, then you are probably offering fringe benefits and will list your business for FBT
It is essential to gather all the information about these offered benefits through our annual FBT Questionnaire. This enables us to calculate every prospective liabilities and lodge your FBT return timely- FBT returns due on 25 June 2019 and payment is to be made by 28 May 2019
WHICH ALL ITEMS CAN BE EXEMPTED FROM FBT?
If you’re offering articles such as Cell-Phones, Laptops, Tablets, Portable printers, Productive clothing, tools of trade or minor and infrequent benefits of value less than $300, then it is not required for you to concern about FBT
The exemption is merely applied only if the benefits are both minor and infrequent
For 100% surety, you can fill our FBT Questionnaire and Schedules
The EASIEST METHOD TO MANAGE YOUR VEHICLE LOG BOOKS
For employers with 20 or more ‘tools of trade’ car and the car needed for the job such as sales rep traveling primarily for the business use, the ATO has announced the new procedure for sanctioning the business use percentage of the car.
It is known as simplified method and in case you meet the outpouring condition, you can apply the general percentage rules to all the tools of trade’ cars retained in your fleet for the first logbook year and the next 4 years. Following are the conditions should be met.
- Valid Logbook retains for at least 75% of the cars in the logbook year
- Instead of the employee, The employer can himself select the make and model of the car
- The value of each car maintained in the fleet should be less than the value of luxury cars limit when purchased. The value of ordinary car maintained in the fleet can range $65,094 in 2018/2019
- The cars are not offered under the category of salary packaging arrangement and employee remuneration package
- Your employees cannot choose to receive additional remuneration in place of operating the car
ARE YOU FULLY COGNIZANT WITH NEW SAFE HARBOUR PROVISIONS FOR WORKHORSE VEHICLES?
It’s the first time ever when ATO has announced safe harbor guidelines for employees that are offered with workhorse vehicles. For example Vans and Utilities. In short, ATO stated that whenever the first vehicle meets the definition of a workhorse vehicle and also the private vehicle meets the following criteria, then that car will be exempted from FBT.
- Not even a single private journey carried out by the employees should exceed 200 kilometers.
- Not more than a total distance of 700 Kilometres covered by the employees for the private occasion should be included in FBT each year.
- Any turn off for a private journey while traveling between employee’s residence and their workplace should not be added more than 2 kilometers to the normal journey of that tour. For example- Dropping the children to the school while traveling to the workplace
IS IT NECESSARY TO LODGE AN FBT RETURN EVEN IF NO FBT IS LEGALLY PAYABLE?
Is it required to lodge an FBT return even if FBT returns are not legally payable? Should you anyways lodge anyone?
The answer to the above question is “Yes”-It is compelled to lodge an FBT even if FBT returns are not legally payable. We recommend you to lodge an FBT returns because it would minimize the audit returns for only 3 years.
Please read our BLOG which describes why it would be beneficial to lodge an FBT returns even if FBT returns are not legally payable?
METHODS TO MINIMISE FBT LIABILITIES.
Here are some of the ways through which you can minimize your FBT liability?
- Reform your fringe benefits with cash salary
- Examine benefits that are exempted from FBT returns.
- Offer benefits which your employees are authorized to claim as an income tax deductions and are benefitting the employees if they had to pay themselves
- It is recommended to utilize employee’s contributions. For example- Employee paying for some of the operating costs of car fringe benefit such as fuel which you don’t repay to them
- It is recommended to note that employees’ contribution may be considered as an attainable income for you as it is liable for GST
Max Margin Accountants is a registered accounting firm based in Melbourne. We specialize in helping our clients with a full array of Business Advisory, Taxation and Accounting services. We help businesses in all industries and sectors including Automatic Mechanic, Hotel and Bar, Barber & Hair Dresser, Car Wash, Home Builder & Architecture, Cafe and Coffee Shop, Cleaner, Computer & IT Industry, Family Day Care, Gym and Personal Trainer, Small Businesses, Medical Practitioner, NDIS Business, eCommerce, Property Investors, Tradies and Taxi Drivers.