Fringe Benefit Tax

Posted by Ross Cassone February 3, 2016

Very soon it will be time for Fringe Benefit Tax (FBT) returns to be lodged with the ATO. The FBT year runs from 1 April – 31 March – separate to the income tax year.

We will be sending out our annual checklist to those entities who we believe are liable for FBT. It is important that the checklists and signed, dated and returned, whether or not they are applicable.

FBT arises when you (as an employer) provide benefits to an employee (or their associate).

Examples of fringe benefits include:

  • allowing your employee to use a work car for private purposes
  • giving your employee a discounted loan
  • paying an employee's gym membership
  • providing entertainment by way of free tickets to concerts
  • reimbursing an expense incurred by your employee, such as school fees
  • giving benefits under a salary sacrifice arrangement with an employee.

The most common example of a Fringe Benefit is private use on a work motor vehicle.

The ATO has the ability to track down vehicles registered within a business and whether or not a FBT return has been lodged – therefore it is important to lodge a return even if the return is Nil.

For fringe benefits tax (FBT) purposes, a car is any of the following:

  • a sedan or station wagon
  • any other goods-carrying vehicle with a carrying capacity of less than one tonne, for example a panel van or utility (including four-wheel drive vehicles)
  • any other passenger-carrying vehicle designed to carry fewer than nine passengers.

There are some circumstances where use of the car is exempt from FBT. For example, an employee’s private use of a taxi, panel van or utility designed to carry less than one tonne, is exempt from FBT if its private use is limited to:

  • travel between home and work
  • incidental travel in the course of performing employment-related travel
  • non-work-related use that is minor, infrequent and irregular (for example, occasional use of the vehicle to remove domestic rubbish).

If you have any doubt as to FBT being applicable or not, please contact one of our accountants on 4655 9247 or through our website www.wardsaccounting.com.au

 

The above information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. Wards Accounting Group Pty Ltd (ACN 105 280 831) ABN 32 105 280 831  is a Corporate Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361

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