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FBT 2019 – What’s new?The FBT year in Australia is from 1 April and ending 31 March the following year, so now is the time to ensure that you are up-to-date with the latest FBT developments in the areas of focus for the ATO.
For the FBT year ended 31 March 2019, the FBT rate remains at 49% in line with last year’s FBT rate.
FBT applies to benefits, given to employees in lieu of or in addition to salary or wages, received and this tax is paid directly to the ATO by employers. Benefits received may include such items as vehicles, car parking, housing, private loans and even, these days, Bitcoin.
The ATO has identified two concerns - employers’ failure to identify and report FBT on items and employers’ incorrect application of exemption provisions when reporting taxable value on items – in areas of concern for the ATO. Let’s delve further…
Where an employer is required to lodge a FBT return, what do you need to know about:
Some employers claim a FBT rebate despite being ineligible to do so. You need to check that you are a rebatable employer and if you are not, then you should ensure you are eligible to receive a FBT rebate before making a claim.
To ensure that an employer reports employee contributions as income on their income tax return and does not overstate the employee contribution amount in order to reduce an FBT liability, the ATO focuses on finding accurate declarations on both the FBT return and the employer’s income tax return.
It is necessary for an employer to verify that a FBT exemption applies to the provision of a motor vehicle to an employee for private use. In addition to supplying this verification to the ATO, the ATO is looking for an employer to keep sufficient records to support an exemption.
An employer will need to look carefully at the complex rules of FBT car parking (slight increase in car parking threshold 2019) and will need to be aware of the Practical Compliance Guideline 2018/3, applicable to car and residual benefits claimed in 2019 and later FBT years. If an employer provides an employee with an eligible vehicle to perform work duties, then this guideline may be applicable.
Living Away From Home Allowance (LAFHA)?
An employer pays a LAFHA to an employee to compensate an employee for additional expenses incurred and for the fact of being away from home whilst employment duties require an employee to live away from their usual residence.
It is important to only claim FBT for eligible employees and to obtain declarations from those eligible employees. Claiming for invalid circumstances or keeping insufficient records of the accommodation and meal components is also closely looked at by the ATO.
The ATO’s LAFHA reasonable total food and drink expenditure for one adult in Australia increases in 2019 by just under 7.5% from 2018. It would behove an employer to check the ATO’s LAFHA guidelines for 2019.
It pays to understand how FBT applies in these areas. To minimise your FBT liability, at YML Group we can prepare and lodge your FBT return and/or calculate any employee contribution.
Our fee for the preparation and lodgment of an FBT return is from $530 + GST and for the calculation of an employee contribution is $260 + GST per item.
How can YML help?
Talk to our YML Chartered Accountants Team today to see how YML Group can assist you with FBT. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.