What is FBT and how does it affect my small business?
The Fringe Benefits Tax year ends on 31 March and is an area of focus for the Australian Taxation Office (ATO). FBT is payable by employers when certain benefits are provided in addition to salary or wages to:
- Former, current, or future employees, or
- Associates (relatives such as your spouse or child).
These benefits might be provided directly by the employer or through a third party.
FBT was introduced to prevent employers reducing the tax liability of employees by providing benefits not recognised as income. Most employers who provide fringe benefits to employees during the course of the year need to register and pay FBT.
At Vine Accounting, we are keen for our clients to understand their FBT responsibilities so they are not at risk of an unexpected Fringe Benefits Tax surprise!
Here are some updates and the ATO’s ‘red flags’ for employers and employees.
- COVID-19 assistance and benefits
- Motor vehicle problem areas
- ATO ‘red flags’:
- Where deductions claimed don’t match what is reported for FBT purposes
- Mismatched FBT and income tax amounts
- When business assets are used personally by owners and staff
- Not lodging FBT returns
- Salary sacrifice problem areas
- Car parking under scrutiny
- Housekeeping essentials
Read this Factsheet to ensure you are across these issues for your business.
