For the 2018 FBT year, from 1 April 2017 to 31 March 2018, employers must pay FBT at a rate of 47 per cent on the grossed up taxable value of fringe benefits, down from 49 per cent in 2016 and 2017 to account for the temporary budget repair levy.
Speaking to Accountants Daily, Nexia senior taxation consultant, Dean Birch, said that while accountants should ensure they update their systems and calculations for the new rate, they should also consider the small businesses concessions that kicked in last year.
From 1 April 2017, the turnover threshold for FBT concessions increased to $10 million, up from $2 million aggregated turnover previously.
Accordingly, Mr Birch says small businesses can now provide exempt car parking fringe benefits if the parking is not provided in a commercial car park and the entity is not a government body or a listed public company.
The increased threshold will also see access to the small business work-related portable electronic device exemption, which allows multiple devices even if they have substantially identical functions.
“If you want laptops, mobile phones or other forms of tools of trade, if you are provided these, you can actually have more than one of those but the key thing there is that they all have to be primarily for work purposes,” said Mr Birch.
“If you start getting too many, like three or four, then the ATO are going to start asking questions.”
Mr Birch also highlighted the ATO’s areas of focus for FBT in 2018, similarly noting the increased focus on declarations and substantiation as previously noted by Tax and Super Australia.
“At a high level, one thing is greater audit activity out there — my advice for any accountant will be to make sure that they've got correct substantiation, record keeping, reporting, all the stuff they should be doing anyway but they need it all in place because the ATO are using their systems and targeting FBT — they are using different methods,” said Mr Birch.
“They are doing checks because they are trying to find out whether there are some issues and it seems that they are putting more resources [towards it] and they've actually indicated that one of their focuses is going to be on FBT this year.
“For example, if a company has acquired a car and there's no FBT in relation to car fringe benefits, well why isn't there — there could be a valid reason but they want to look at whether you have got an FBT liability or not.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.