It is now time for businesses to determine if they have an FBT exposure and if so start to collate the relevant information to complete an FBT return for the 2021 year.
Fringe Benefits Tax 2021 - What it means for your business
The Fringe Benefits Tax [FBT] year ended 31 March 2021.
It is now time for businesses to determine if they have an FBT exposure and if so start to collate the relevant information to complete an FBT return for the 2021 year.
What is FBT?
FBT [Fringe Benefits Tax] is a tax employer pay on certain benefits they provide to their employees, including their employee’s family and other associates.
Common Fringe Benefits
There are various categories of Fringe Benefits. The common Fringe Benefits include:
- Car Fringe Benefits
- Entertainment Fringe Benefits
- Living away from home allowance Fringe Benefits
- Loan Fringe Benefits
- Car parking Fringe Benefits
- Expense payment Fringe Benefits
- Housing Fringe Benefits
COVID-19 assistance and benefits
The impact of COVID-19 caused many businesses to revisit their existing operating model. Meaning many businesses are likely to have provided different types of benefits in order to assistance their employees due to COVID-19.
For at least some of these benefits, FBT may need to be considered.
This is a case by case basis, as such we would recommend you contact us to discuss your individual circumstances surrounding employee benefits provided.
Lodging FBT Returns
The 2021 Fringe Benefits financial year runs from the 1st of April, 2020 to the 31st of March, 2021. FBT returns are to be lodged by the 25 June 2021
The frequency of paying your FBT liability is determined by the amount of FBT required to be paid. If the Fringe Benefit was less than $3,000 the prior year, you are required to pay the Tax on the fringe benefit at the time of lodgement. If the Fringe Benefit the prior year exceeded $3,000, you are required to pay the Tax liability on a quarterly basis with your Business Activity Statements.
If you are registered for Fringe Benefits Tax and have not provided any benefit deemed a Fringe Benefit for the financial year, you will not incur a tax liability. However, given you are registered for FBT, you are required to lodge an FBT return as a nil lodgement.
Activities targeted for Audit by the ATO include
- Motor Vehicle benefits
- Living away from home Allowances
- Car parking valuations
- Gym memberships
- Non-lodgements of FBT return
- Nil Lodgements
What to do next
Each year the ATO may issue updated or new regulations affecting the Fringe Benefits rules and guidelines. These may affect businesses registered for Fringe Benefits, it is encouraged to stay up to date with potential changes to legislation each financial year.
If you have any queries regarding the above, for assistance please contact us on (02) 4601 1000 [Camden] or (02) 4210 6030 [Wollongong].
