Speaking at HLB Mann Judd’s 2018 Tax Series, partner Mariana von-Lucken said there were certain “obvious” issues that would cause the tax office to take a closer look, including the non-lodgement of FBT even if there was reason to do so.
“There may be a good reason why you're not lodging but always keep in mind that if you should have lodged an FBT return because you had employee contributions or otherwise deductible made it nil and you've decided not to lodge an FBT return, it's open for the ATO to come and investigate at any time,” said Ms von-Lucken.
“On the other hand, if you have lodged, you've got an assessment period of about three years.”
According to Ms von-Lucken, other issues that would attract the ATO’s attention include employee rebates, car fringe benefits, living-away-from-home-allowances (LAFHA), and car parking valuations.
“For car fringe benefits, if you have cars in your P&L but there's no FBT return lodged, that's an obvious one [that will alert the ATO],” said Ms von-Lucken.
“For car-parking, it’s just the valuation method; there are so many things you could get wrong there.”
Her warnings come after the ATO issued a reminder to tax professionals earlier this month, highlighting how “a simple mistake or omission” can attract their attention.
Accounting network Nexia has also spotted the ATO’s increased audit activity this year, calling for advisers to ensure that they have got declarations and substantiation in place.
The ATO has been vocal in its focus on employer-provided motor vehicles and private use associated with it, having noted the failure of some employers to identify or report these fringe benefits or incorrectly apply exemption provisions.
Draft guidance, PCG 2017/D14, provided by the ATO clarifying “minor, infrequent and irregular” private travel for work vehicles has been welcomed by practitioners as it helps provide certainty to a previous “grey-area” exemption.