2017 FBT Compliance Update

Ahead of the 2017 FBT return lodgment period, ATO Assistant Commissioner Catherine Willis recently outlined several matters that should be kept in mind when preparing 2017 FBT returns.

Speaking at a Wolters Kluwer webinar “FBT: 2017 ATO  Compliance Updateon 23 February 2017”, the Assistant Commissioner said that the ATO’s compliance focus would include:

  • car benefits
  • correct calculation and reporting of living-away-from-home allowance (LAFHA)
  • incorrect claiming of FBT exemption or FBT rebate
  • employee reward programs
  • housing benefits, and
  • benefits provided to directors of private companies

In relation to car benefits, Ms Willis said the ATO is intending to update the relevant section of its “FBT – a guide for employers” to provide further guidance. In particular, she mentioned that the private use of employer-provided motor vehicles was an area of focus.

According to the ATO, common errors in relation to LAFHA include claiming reductions for ineligible employees, failing to obtain required declarations from employees and failing to substantiate expenses.

The Assistant Commissioner said that the incorrect claiming of an FBT exemption or rebate by ineligible employers was an ongoing issue.

In relation to employee reward programs and benefits provided to directors, she said that one issue was whether some of the rewards provided were in fact salary and wages rather than benefits. Another issue was whether the minor benefits exemption could be applied to the reward.

Ms Willis also recommended that employers and return preparers go to the “What attracts our attention” section of the ATO website for more details of specific FBT issues that are of concern to the ATO.

Legislative changes

The Assistant Commissioner also reminded employers of several legislative changes applying from 1 April 2016, including:

  • a new small business concession for work-related portable devices which allows an exemption for multiple similar items in the same FBT year
  • a new limit on concessional treatment of salary packaged meal entertainment benefits for not-for-profit employers.
  • the requirement for all employers to report salary packaged entertainment benefits on employee payment summaries
  • a single basic car rate of 66 cents per kilometre will apply to all cars for the purposes of the otherwise deductible rule for business use of employee cars

FBT return lodgment and payment dates

  • Self-preparers – lodge and pay by 21 May
  • Clients of tax agents:
  • Payment due by 28 May
  • Return due by 25 June of lodged electronically
  • Return due 21 May if paper return lodged

 FBT tax rates – 2017 year

  • FBT rate is 49%
  • Type 1 gross-up factor is 2.1463
  • Type 2 gross-up factor is 1.9608

For an hands on workshop on how to prepare your 2017 Fringe Benefits Tax  return efficiently, register for our one-day workshop with FBT Solutions.