We’re fast approaching the end of March and that means it’s time to lodge your Fringe Benefits Tax return.
If you lodge your FBT return yourself, you must lodge it by 21 May.
If you pay your FBT by instalments, you should lodge all your activity statements for the FBT year ending 31 March, including the March quarter, before lodging your FBT return. Your return will not be actioned until all instalments are paid.
The FBT year runs from 1 April to 31 March.
Fringe benefits Tax rates:
The FBT rate changes from the year ending 31 March 2015 onward.
Ending 31 March 2014 (and prior years) – 46.5%
Ending 31 March 2015 – 47%
Ending 31 March 2016 and 31 March 2017 – 49%
Ending 31 March 2018 onward – 47%
What is FBT?
Fringe Benefits Tax is a tax paid on certain benefits provided to employees or an associate of an employee. It is separate from income tax and is based on the taxable value of the various fringe benefits provided by your employer.
Fringe benefits Tax (FBT) law includes various categories of fringe benefits and specific valuation rules for each category.
You will need to pay FBT even if the benefit is provided to an associate of your employee or by a third party under an arrangement with you.
Common Fringe Benefits include:
- Car – if you make a car you own or lease available for the private use of your employee, you may provide a car fringe benefit
- Car parking
- Entertainment – the provision of food, drink or recreation, meals, cocktail parties and staff social functions
- Expense payment – can be business or private expenses or a combination of both, but they need to be incurred by the employee
- Loans – you provide a loan fringe benefit if you give your employee a loan and charge no interest or a low rate of interest. A low rate of interest is one that is less than the benchmark interest rate. The benchmark interest rate for the FBT year ending 31 March is 5.95%
- Housing – when you provide accommodation is their usual place of residence
- Living away from home – if you pay an allowance to your employee to cover additional expenses incurred, because they are temporarily required to live away from their normal place of residence to perform their employment duties
The following are not fringe benefits:
- Payments of salary or wages.
- Shares purchased under approved employee share acquisition schemes.
- Your employer contributions to complying superannuation funds.
- Employment termination payments (for example, a company car given or sold to your employee on termination).
- Payment of amounts deemed to be dividends.
- Exempt benefits such as certain benefits provided by religious institutions to their religious practitioners.
You can reduce the amount of Fringe Benefits Tax (FBT) you pay by using employee contributions. For example, an employee receiving a car fringe benefit can pay for some of the operating costs (such as fuel) that you do not reimburse. Employee contributions may be assessable income to you and may be subject to GST.
A common mistake is not accounting for all business expenses that are included as fringe benefits. To ensure that you do actually fulfil your FBT obligations, Fortis Accounting Partners can help you report and pay FBT. Please don’t hesitate to get in touch with the team on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com
