FBT 2024 – What owners need to know

SHOULD YOU BE REGISTERED FOR FBT?

Generally, if you have employees (including Directors) and you provide them with cars, car parking, entertainment (food and drink), employee discounts, loans, or reimburse private expenses, then you are likely to be providing a fringe benefit and we will need to register your business for FBT. There are 13 defined Fringe Benefit categories in the FBT law.

It’s important you start gathering all the details of these provided benefits as soon as possible using our annual FBT Questionnaire and Schedules, so we can calculate any potential FBT liability and lodge your FBT return on time – due 25 June 2024 with payment to be made by 25 June 2024.

SHOULD YOU LODGE AN FBT RETURN EVEN IF NO FBT IS PAYABLE?

Where no FBT is payable there is legally no need to lodge an FBT return, but should you lodge one anyway?

Our strong recommendation to you is yes, you should lodge an FBT Return if you provide benefits to employees, even if no FBT is payable.

This restricts the ATO’s audit window to only 3 years from the date of lodgement. Otherwise, the ATO is entitled to go back an unlimited number of years and audit your business and possibly find areas where they will charge you FBT and penalties.

KEY THINGS YOU MUST DO

Whilst we strongly recommend that you register for FBT and if applicable lodge a Nil FBT Return, if you decide not to there is still key information that we need you to record.  We will then rely on this when we complete your 2023 annual Financial Statements. Here’s a summary of what you need to do:

1. 1. Carefully manage the private use of business cars, including the travel between home and work. The ATO is conducting a data matching program aimed at motor vehicles to capture benefits that aren’t currently being reported through FBT. If significant variances are identified a full ATO audit may follow.

2. 2. Review all meal entertainment expenses provided to employees, associates and clients and prepare a register that outlines the following for every event:

• • The total cost (GST inclusive)

• • How many employees were present and their names

• • How many employees’ associates were present and their names

• • How many clients were present (names not needed)
  • The nature of the event (dinner, lunch, coffee, drinks, etc.)

             3. Consider if you have provided any other fringe benefits.

 

WHAT ITEMS ARE EXEMPT FROM FBT?

The following items are unlikely to be subject to FBT: mobile phones, laptops, tablets, portable printers, protective clothing, tools of trade etc, or minor and infrequent benefits that are less than $300 in value.

To find out if you are eligible for the minor and infrequent benefit exemption – please ask us to send you our Applying the Minor & Infrequent Benefits Exemptions factsheet.

WAYS YOU CAN REDUCE YOUR FBT LIABILITY

Here are some ways in which you can reduce your FBT liability:

• • replace your fringe benefits with cash salary;

• • provide benefits that your employees would be entitled to claim as an income tax deduction if they had to pay for the benefits themselves;

• • look at providing benefits that are exempt from FBT; and

• • use employee contributions, for example, an employee paying for some of the operating costs of car fringe benefit such as fuel that you don’t reimburse them for. You need to be aware that employee contributions will be deemed assessable income to you and subject to GST.

FBT FACTSHEETS

Please let us know if you would like us to send you any or all of the following FBT Factsheets:

• • What is a Car Fringe Benefit?

• • Employee Business Cars – Tips & Traps

• • Entertaining, Meals & FBT – Tips & Traps

• • Using an Associate Lease to boost family income

• • Minor and Infrequent Benefits

• • How the ATO identifies potential audits

• • Why you should lodge a FBT Return

• • Workhorse Vehicles and new Safe Harbour provisions