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FBT – Staying off the ATO radar

FBT – Staying off the ATO radar

It is that time of the year again for all employers to review their Fringe Benefit Tax (FBT) obligations.

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FBT is a tax payable by employers on non-cash benefits provided during to employees and/or their associates. Employees can include:

  • current, future or past employee,
  • director of a company, or
  • beneficiary of a trust who works in the business.

Unlike the financial year, the FBT year operates from 1 April to 31 March. Employers must review and report any FBT to the ATO by 21 May of each year.

Common fringe benefits this year include the private use of motor vehicles, entertainment by way of food, drinks or recreation, and home office expenses.

There is often a misunderstanding when determining private use on motor vehicles. According to the ATO private use exists when the motor vehicle is ‘available for private use’ rather the ‘actually used for private’. Private use can occur even when motor vehicles are garaged at a home afterhours. We recommend a log book to be maintained to report all business and non-business travel even if the private use is minimal.

The ATO have provided some FBT relief on motor vehicles during the COVID-19 lockdown period. Generally, only motor vehicle costs incurred outside the lockdown period will be subject to FBT. This concession is only available in certain cases and does require a log book for the purposes of determining private use.

Many of us worked from home during the COVID-19 pandemic. Many employers transitioned to working from home (WFH) arrangements by providing electronic devices and other office equipment to their employees. Although FBT on many of these items may be exempt, the circumstances each of these may need to be considered on a case-by- case to assess any FBT implications.

Please feel free to have a chat to one of our friendly Plant and Associates team members to see if there are any potential FBT issues in your organisation.

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