At 47% tax in the dollar it definitely pays to know if your business should be paying fringe benefit tax (FBT) or not. The FBT year runs from 1 April to 31 March, so now is the time to assess your business\u2019s FBT status.<\/p>\n
It is quite common for businesses to be caught out in this area and there are heavy penalties from the ATO for businesses that are incorrectly reporting fringe benefits or avoiding paying FBT altogether.<\/p>\n
So what is a fringe benefit?<\/strong><\/p>\n A fringe benefit is any kind of benefit provided to an employee, their family, associates or any other third party under a business arrangement. If you are a director and conduct your business through a company or trust, you may also be an employee.<\/p>\n Fringe benefits tax is separate to income tax and is calculated on the taxable value of the fringe benefits provided. The fringe benefit tax (FBT) rate is 47%.<\/p>\n So it pays to know if you are providing, or deriving (if Director and employee), fringe benefits from your business as there is a process that you need to manage and tax to be paid.<\/p>\n The types of things that attract fringe benefit tax include:<\/strong><\/p>\n Fringe benefits are not just limited to these things listed above. Basically anything that an employee derives that is seen to provide a benefit may be included and these are classified as\u00a0Residual fringe benefits<\/a>\u00a0such as:<\/p>\n So you can see that there are a lot of things that may attract FBT and if you are not aware of these and it catches up with you down the track you could be in deep water.<\/p>\n So what should you be doing if you are providing fringe benefits?<\/strong><\/p>\n If your business is providing fringe benefits to your employees or yourself if you are a Director\/employee, you are required to:<\/p>\n If you are unsure of whether any of the above applies to you, then contact us and we will arrange a review of your circumstances and let you know if you have an FBT issue. You do need to be certain of your position on this, because the ATO are looking out for certain \u201cflags\u201d in your tax returns to then initiate a review into your FBT position. Call us to arrange a review if you are not 100% confident of your position on this.<\/em><\/strong><\/p>\n The You Tube video below has been put together by the ATO. It highlights some of the common fringe benefits that business owners overlook for FBT.<\/p>\n\n
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