If you are an employer and have provided Fringe Benefits to employees over the course of the Fringe Benefits Tax year, from 1 April 2011 to 31 March 2012, you will be liable for FBT on those benefits.
Eligible Fringe Benefits include:
- Allowing an employee to use a work car for private purposes
- Providing employees with cheap loans
- Releasing an employee from an owed debt
- Reimbursing an expense incurred, such as school fees
- Providing accommodation
- Providing living-away-from-home allowances
- Providing entertainment by the way of food, drink or recreation (this may include any events that you had at Christmas time, as we noted in our last edition)
- Providing salary package arrangement, or
- Providing goods at a lower price than they are normally sold to the public
The FBT year ends each year on 31 March and payment of any necessary FBT is due by 21 May of the same year. Eligible benefits that are paid must be recorded on employees’ payment summaries for the income year ending 30 June of the same year.
If an employee is receiving certain fringe benefits of greater total taxable value than $2,000 in an FBT year, you must report the total taxable value to the Australian Tax Office.
To ensure that your business remains up to date with your FBT obligations, always keep records of fringe benefits that have been provided for employees. Also be aware that any costs incurred as a result of providing fringe benefits may be an allowable income tax deduction.
All records such as invoices relating to the provision of fringe benefits should be kept for a minimum of five years from the date of the transaction.
Always consult with an accounting and taxation professional to ensure that you are handling your FBT obligations correctly and efficiently.
If you have any questions or would like further advice in relation to your business’ FBT liabilities contact the experienced team of accountants and tax lawyers here at The Quinn Group on 1300 QUINNS or submit an online enquiry to book an appointment.