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Top 5 Tips in Relation to Fringe Benefits Tax

Top 5 Tips in Relation to Fringe Benefits Tax

The FBT year runs from 1 April to 31 March.  There have been some changes in the past few years and rates having moved from last year.  Now is the time to collate and prepare your FBT Return due for lodgement by 21 May 2018. Here are some tips which will help clarify some points:

Changed tax rates 
Due to the winding down of the 2% Temporary Budget Repair Levy, the FBT rate has reduced from 49% to 47% in the 2018 FBT year. The FBT Type 1 and Type 2 gross up rates which are relevant for calculating the taxable value of benefits have also been adjusted accordingly to 2.0802 and 1.8868 respectively. This change has also impacted on the concessional cap for Not-for-Profit employers which have reverted back to $30,000 for public benevolent institutions (other than hospitals) and rebatable employers and $17,000 for hospitals and public ambulance services.

The cap for salary packaged entertainment remains at $5,000.

Other rate changes include the car parking threshold, statutory benchmark interest rates, and reasonable food and drink amounts for Living Away From Home Allowances.

 New guidance on employee travel expenses 
A welcome piece of new ATO guidance has been released.

Draft Tax Ruling 2017/D6 sets out some general principles for the treatment of many common travel expenses. This draft ruling provides a clearer interpretation of when an employee’s travel expenses, including transport and accommodation, are, or would otherwise be, deductible for income tax and FBT purposes.
Utes are fringe benefit exempt, aren’t they? 
The ATO released draft guidance on this area recently. You might like to look at PCG 2017/D14 – Exempt car and residual benefits: compliance approach to determining private use of vehicles. The ATO is continuing the use of data matching programs with the various state Road Traffic Authorities with a view to identifying FBT reporting relating to vehicles. The guidance provides points and examples on how to determine whether private travel would be considered minor, infrequent and irregular.
Reportable fringe benefits
The $2,000 threshold hasn’t changed but Centrelink has advised of changes to the way they use the Reportable Fringe Benefits Amount (RFBA) on employee payment summaries. From January 1 2018, Centrelink will be using 100% of the RFBA to determine some family benefit payments (unless you are a not-for-profit organisation).

Uber and taxis 
Does your organisation use the FBT exemption for taxi travel? An employer may provide an employee travel in a taxi where the travel is a single taxi trip beginning or ending at the employee’s place of work, or is a taxi trip due to illness of the employee, and an FBT exemption applies.

The ATO is reviewing its interpretation of the definition of “taxi” (TDP 2017/2) as it states that the exemption “does not extend to … ride-sourcing services … not licensed by a state or territory as a taxi”. It is still possible that the ATO may accept that a ‘taxi’ could include a ride-sharing vehicle or other vehicles for hire.

WHEN TO LODGE

You must lodge your return and pay the total FBT amount you owe for the FBT year ending 31 March 2018 by 21 May 2018.

Contact McFillin & Partners today to arrange an appointment or to speak to one of our Accountants Ph: 3263 7030