Archived News - 2006
2006-02-28
FBT Check-in Time
The fringe benefits tax (FBT) year end is just around the corner (31 March 2006).
Small businesses bring in around 23% of FBT revenue collected by the ATO - that is currently over $700 million!
Recent investigations by the ATO show that FBT compliance amongst small businesses is not as good as it could be.
So it is that time of year again to check if you have provided any fringe benefits to your employees that are taxable and make sure you are ready to lodge your FBT return and pay any FBT liability on time.
Checklist of some FBT basics:
- the current FBT year runs from 1 April 2005 to 31 March 2006
- as an employer, you have to calculate and pay any FBT liability
- if you have an FBT liability, you must lodge your FBT return and pay your FBT liability by 21 May 2006
- FBT is separate from income tax and is levied at the top personal marginal rate of income tax, including the Medicare levy (i.e., currently 48.5%)
- you can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT you pay
- where the total taxable value of reportable fringe benefits for an employee is more than $1,000 for the FBT year, you will have to disclose this value (grossed-up) on the employee's payment summary
DUE DATE FOR FBT
Because 21 May 2006 falls on a Sunday this year, you can lodge your FBT return and pay any FBT liability at the latest by Monday 22 May 2006.
Tips for reducing your FBT exposure:
- Everybody is a winner if you can make use of FBT exempt benefits.
- Provided you comply with any requirements that make a particular benefit FBT exempt, you (as the employer) do not have to pay any FBT on this benefit and these types of benefits are generally not subject to income tax in the hands of your employees.
A checklist of some common FBT-exempt work related items:
- mobile phones (must be used primarily for employment)
- a notebook, laptop or similar computer (only 1 per employee per year)
- computer software (e.g., electronic diary software)
- an electronic diary or similar item
- briefcases and calculators
- protective clothing required for a job
- tools of trade (e.g., you are in the building industry and provide loose tools like hammers, wrenches, chisels and hand operated power tools)
MORE EXEMPT BENEFITS
From 1 April 2006, personal digital assistants and portable printers designed for use with work-related portable computers are exempt.
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