In the past, the ATO’s audit department has not focused extensively on the Fringe Benefits Tax. This, coupled with the fact that it is one of the most unpopular taxes and that businesses can “cash out” on the benefits has meant that a number of business owners have been ignoring it, despite warnings.
This year it seems the ATO will finally be increasing how many audits they make on the area and they are quite open about how extensive these audits will be.
What is the Fringe Benefits Tax (FBT)?
The FBT is a tax on the benefits that a business provides to employees and their associates. It is very important to remember that most business owners are also employees. Expenses that will expose you to the FBT include work vehicles, paying for staff Christmas parties, dinners and gifts, or even paying for personal expenses for a member of your staff.
Most businesses will provide us with FBT to some extent when we are preparing their return, however, if we are not provided with the correct information, it is not possible for us to provide you the right advice for your situation.
How to avoid being audited for the Fringe Benefits Tax
The simplest way to avoid an audit is to simply lodge a correct FBT return. The FBT year ends on the 31st March, if you have failed to lodge an FBT return this year, then expect an ATO letter soon. The ATO’s resources are extensive, they are able to crosscheck your tax return across government databases, public information and ATO benchmarked data.
To ensure that your FBT return is completed correctly, we recommend having a chat to one of our experienced accountants. Get in touch with us here or give the office a call on 07 5598 3800.