Most Adelaideans are familiar with the Fringe. However, you might not be familiar with Fringe Benefits Tax, FBT is a tax that you get charged for private use of business assets like tickets to this year’s Fringe festival.
FBT is paid by employers on certain benefits they provide to their employees or their employees’ families or other associates.
So, what are some examples of fringe benefits?
- Allowing an employee to use a work car for private purposes
- Giving an employee a discounted loan
- Paying an employee’s gym membership
- Providing entertainment by way of free tickets to concerts,
- Paying for lunches or dinners
- Reimbursing an expense incurred by an employee, such as school fees
- Giving benefits under an employee salary sacrifice arrangement
Previously, a common accounting process would be to reduce your FBT down to NIL by using an “Employee FBT Contribution”. And, based on this, a FBT return wouldn’t be lodged. But that’s about to change.
So, why should I lodge a Fringe Benefits Tax Return?
The change is because the ATO recently announced that the ‘Fringe Benefits Tax’ gap is over $1 billion and plans to undertake targeted compliance engagements for high-risk employers.
What this now means for you is that while there has no cost to you because we haven’t prepared an FBT Return for you, in the future the ATO can go back an UNLIMITED NUMBER OF YEARS and hit you with an FBT audit. It’s possible you may then get the tap on the shoulder to be assessed for higher amounts of FBT plus penalties.
There is some good news though
That said, we want to make you aware of an option that may help you sleep better at night.
If we prepare and lodge your 2022 FBT Return now, the length of time the ATO can audit you for FBT purposes is limited to just three years.
By limiting this potential ATO audit period to just three years, the risk to your business of having to pay large amount of FBT and penalties in the future is vastly reduced.
What we need to do
To achieve this extra benefit for you, we’ll need to:
- Complete our 2022 FBT client questionnaire and return it to our office
- We will review the returned questionnaire
- We will prepare your 2022 FBT Return and FBT Report
- We will lodge your 2022 FBT Return and liaise with the ATO for your FBT payments
What it will cost you
There’s no such thing as a free lunch (unless, of course, it’s covered by FBT). However, we estimate our price for this service will be between $500-$2,000 + GST.
Three tips from The Financial Foreman
- Complete the questionnaire we sent you and return to our office
- Email us confirming that you’re happy for us to undertake this work for you
- Get a good night’s sleep knowing The Financial Foreman is all over FBT
Once we gather the information, you’ll be given a fixed quote to do the work. This additional work is optional, but we strongly recommend it. To find out more, call Josh at The Financial Foreman on (08) 7129 4433 or send us a message on our contact page. From here you can set up an appointment to talk about your FBT obligations, lodging a FBT Return and what it means for you and your employees.