Whilst we do recommend that you register for FBT, and if applicable lodge a Nil return, should you decide not to there is still key information that we need you to record as at 31 March. We will then rely on this when we complete your 2019 accounts. Here’s a summary
- On 31 March and 1 April have your team take a photo of the odometer readings using their phones and email it to you, or to a nominated person to collate them all for you instead of running around to each vehicle and manually recording them. Template available here.
- Carefully manage the private use of business cars, including the travel between home and work. The ATO is conducting a data matching program aimed at motor vehicles to capture benefits that aren't currently being reported through FBT.
- If selected for review, the ATO will review your odometer readings and calculate the distance between your employee’s home and your office. If significant variances are identified a full ATO audit may follow.
- Review all meal entertainment expenses provided to employees, associates and clients and prepare a register (template available here) that outlines the following for every event:
- The total cost (GST inclusive)
- How many employees were present & their names
- How many employees’ associates were present & their names
- How many clients were present (names not needed)
- The nature of the event (dinner, lunch, coffee, drinks, etc.)
- Are your employees actually living away from home or just traveling? The ATO is looking closely into taxpayers claiming LAFH allowances to ensure they aren't incorrectly accessing FBT concessions. If they are taking ad hoc trips interstate they are probably just travelling and only entitled to travel deductions, not FBT concessions for LAFHA's. If they are setting up a temporary home and keeps their ordinary home unrented when interstate, it is more likely they can access LAFHA concessions.
- Two laptops are better than one. If your small business turnover is under $10M, you can provide employees more than one work-related portable electronic device, if same or similar to that already provided in the same FBT year you still pay no FBT.
- From 1 April 2018 salary packaged meal entertainment and entertainment facility leasing expenses are included as reportable fringe benefits and are to be grossed-up using the 1.8868 gross-up rate.
- If your FBT liability was $3,000 or more last year, expect to pay your 2019 liability over four quarterly instalments.
- FBT Returns - $nil Liability returns should still be lodged, even where benefits are ‘cashed out'. Lodging a NIL return reduces the ATO's period of review to 3 years and reduces the likelihood of audits.
We highly recommend that you action point 1 above at close of business 31 March for cars that are garaged on business premises. Alternatively, you should arrange for your employees to take a photo of their odometers when they finish their evening travels that night if the car is garaged at their home.
A decision on whether to register for FBT can then be made as late as 25 June 2019. Please note, if you decide to register and lodge a Nil return and limit the ATO’s ability to retrospectively audit your business that we will need sufficient time before 25 June 2019 to process your return.