FBT Essentials for Busy Small Businesses: What You Need to Know Before March 31st

Attention small business owners!

The Fringe Benefits Tax (FBT) year ends on March 31st, 2024. This guide will answer your essential FBT questions and help you stay compliant.

Do I Need to Register for FBT?

You likely need to register if you provide any employees (including directors) with:

• • Motor Vehicles

• • car parking

• • Entertainment (food and drinks)

• • Employee discounts or loans

• • Reimbursement for private expenses

Should I Lodge an FBT Return Even if I Don’t Owe Tax?

YES! We highly recommend lodging a return, even if you don’t owe FBT. This limits the ATO’s audit window to 3 years. Otherwise, they can audit any past year.

Key Actions by March 31st, 2024:

• • Gather odometer readings: Get your employees to photograph their car odometers and email them to you. This helps determine if the “operating cost” method reduces your FBT liability.

• • Manage private car use: Carefully monitor home-to-work commutes and personal use of business vehicles. The ATO is actively checking for unreported benefits.

• • Review meal entertainment: Prepare a record of meal entertainment expenses, including:

     

    • • Total cost (including GST)
    • • Number of employees and their names
    • • Number of employee associates and their names (clients’ names not required)
    • • Nature of the event (dinner, lunch, etc.)

What’s Exempt from FBT?

Items like:

• • Electric Vehicles – conditions apply – read our updated blog

• • Mobile phones

• • Laptops

• • Tablets

• • Tools of the trade

• • Minor and infrequent benefits (under $300)

Reducing Your FBT Liability:

• • Consider offering cash salary instead of some fringe benefits.

• • Provide benefits employees could claim as tax deductions if they paid for them – eg mobile phone or laptop

• • Allow Novated Leases – so that the FBT issue is dealt with on staff pay slips. Pre and post tax deductions.

• • Look for FBT-exempt benefits.

• • Use employee contributions (be aware of tax implications).

Get Free FBT Factsheets:

We offer several free factsheets on various FBT topics. Contact us to request them below.

Next Steps:

Don’t ignore this issue. ATO had been asleep on this issue for many years but now have the will and the data to pin down any businesses who are not correctly reporting their obligations.

We can help you meet your FBT obligations and reduce your tax liability. Contact us today with any questions!

Remember: This blog post is for informational purposes only and should not be considered tax advice. Always consult with a qualified tax professional for personalized guidance.