Fringe benefits tax (FBT) is a tax employers pay on certain benefits they provide to their employees – including their employees’ family or other associates. The benefit may be in addition to, or part of, their salary or wages package.
Abbotts provide comprehensive advice on FBT and can ensure you meet your obligations with the correct application, reporting and lodging of a FBT return.
Below are some of the fringe benefit issues that may affect your business that Abbotts can assist you in:
- Planning for Fringe Benefits Tax
- Exemptions and Concessions
- Non-Profit Organisations and FBT
Planning for Fringe Benefits Tax
The first step of planning for FBT is understanding what is and not subject to the tax, and if any of these benefits have been provided by you or your business to its employees or their associates in respect of that employment.
A non-exhaustive list of fringe benefits that fall within the legislation include:
- Car fringe benefits (incl. parking),
- Entertainment fringe benefits,
- Expense payment fringe benefits,
- Housing and property fringe benefits,
- Loans and debt waiver fringe benefits, and
- Living away from home fringe benefits.
Reporting for FBT occurs at the end of an FBT year (ending 31 March) as opposed to at the end of a financial year - we can assist your business with scheduling your reporting and payment requirements to satisfy your FBT requirements by the required dates.
There are also other factors that can be planned to affect the balance of FBT payable by your business. We can work with you to reduce your exposure to fringe benefits tax by replacing payments that are fringe benefits with schemes and benefits that either fall outside of the legislation, or are classified as an exempt benefit.
Understanding this starts with good record keeping. Keeping adequate records of all expenditure will help you correctly work out the amount of fringe benefits tax payable when a benefit is provided to an employee. We can guide you through what records need to be kept, enabling you or your business to substantiate the claims of various exemptions or concessions that reduce your fringe benefits tax liability.
Exemptions and Concessions
Some benefits are exempt from fringe benefits tax or receive concessional treatment (for example, living away from home allowance). Specific exemptions and concessions apply to some non-profit organisations. We can assist you to manage your FBT affairs that attracts no more tax than what you are legally obliged to pay.
These include items such as:
- Small business concessions,
- Work-related exemptions,
- Minor benefits exemption, and
- Concessions, including specific concessions to Non-Profit Organisations (NFP)
Fringe benefits tax is a complex and highly legislated part of our taxation landscape. Abbotts specialise in managing the structures, supporting documentation and record keeping to make your tax costs associated with FBT lower and to ensure your ongoing management costs associated with these laws are as cost efficient as possible.
Non-Profit Organisations and FBT
If your organisation provides a fringe benefit to its employees or to associates of its employees, your organisation may have a fringe benefits tax liability.
Depending on the type of organisation you are, certain benefits provided to your employees receive concessional FBT treatment. To receive these benefits, there may be a requirement that you are both registered with the ACNC and endorsed by the ATO. We can assist to see if this requirement is required for your particular NFP's circumstances.
Concessions that may be available to NFP organisations include:
- FBT exemptions - subject to a capping threshold,
- FBT rebates - subject to a capping threshold, and
- Salary packaging and entertainment - subject to a separate capping mechanism.
Abbotts can assist your NFP in understanding where your organisation sits within the legislation, provide guidance on any relevant exemptions or rebates and assist with ongoing compliance requirements.
Partner, Abbotts Chartered Accountants
David is our Tax Specialist and has worked in the tax and accounting field since 1982. David spent several years early in his career working in the ATO. He joined the Abbotts team in 1997 and became a Partner of the Practice in July 2000.
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