Ah, the joys of taxation!
Not only are you probably preparing yourself for the upcoming EOFY, and the tax implications of this busy time of year, but in March, you’re being questioned on fringe benefits tax (ANOTHER tax, we know, we know…).
Are you reimbursing the mortgage payments of certain staff members, perhaps, as part your recruitment strategy to lure them over to Melbourne? Providing a car to certain staff members via a novated lease?
You’ll be surprised what requires FBT treatment, consider these:
- Do you and your team fancy after-work drinks every so often?
- What about EOFY celebrations?
- Hold a Christmas function for staff (and their partners) at a nice Melbourne restaurant last year?
Year after year, Melbourne business owners are caught off-guard by the unique dates of the Fringe Benefits Tax (FBT) year (i.e.,1 April though 31 March).
Indeed, as the end of another FBT year fast approaches, Australian accountants are sure to be dealing with many stressed-out business owners who’ve come to them last minute, confused about what is required of them by the ATO when it comes to fringe benefits taxes.
What surprises many of our clients is that FBT applies to dozens of non-cash employment benefits. Given the tax is levied on the employer, they are the ones responsible for reporting their FBT obligations so as to comply with Australian law.
Is FBT exciting? Of course not! Can this get complicated? You bet!
Further still, each new FBT year is met with adjustments to certain FBT rates and thresholds, and changes in FBT legislation. If Melbourne proprietors hadn’t already flocked to their nearest accountant by now, these pesky annual changes are normally what does it.
Indeed, this current 2018 FBT year (ending March 31) is the first since the FBT rate was temporarily elevated to 49% for two years. Returning to 47% this year, the FBT rate is once more aligned with the top individual marginal tax rate.
We appreciate that business owners prefer spending their time doing anything other than tax (we wouldn’t be here otherwise!), especially regarding something as complicated as fringe benefits tax,
But what is worse is ATO penalties for non-compliance!
Consider it a pit stop before June 30 hits; oh the joy!
For more information on the types of benefits that can lead to FBT, head to: https://www.ashfords.com.au/fringe-benefits-tax/