ATO release annual FBT rates & thresholds

The following annual  FBT Tax Determinations issued today:

TD 2013/5:Fringe benefits tax:  for the purposes of section 28 of the Fringe Benefits Tax Assessment Act 1986 what are the indexation factors for valuing non-remote housing for the fringe benefits tax year commencing on 1 April 2013?

TD 2013/6: Fringe benefits tax:  for the purposes of section 135C of the Fringe Benefits Tax Assessment Act 1986, what is the exemption threshold for the fringe benefits tax year commencing on 1April 2013?

TD 2013/ 7:Fringe benefits tax:  what are the rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing on 1April 2013?

TD 2013/8: Fringe benefits tax:  what is the benchmark interest rate to be used for the fringe benefits tax year commencing on 1April 2013?

The car parking threshold for the fringe benefits tax year commencing on 1 April 2013, will issue in late May.

ATO focus on Micro & SME businesses who fail to meet their FBT obligations

Fringe benefits tax (FBT) – the year ahead (from the ATO website)

Over the coming year, we’ll be focusing on the failure of some micro and small-to-medium employers to recognise and comply with their fringe benefits tax (FBT) obligations.  We are particularly concerned that these employers are not registering for FBT and lodging FBT returns when they should.  We’re conducting data-matching activities to identify businesses operating outside the FBT system.

Don’t forget to consider the FBT implications when you provide non-cash benefits, such as motor vehicles, to your employees. If you use employee contributions to reduce your FBT liability, make sure you include these at the correct label on your tax return.

We will provide help and support, particularly to employers that have recently started a business, to make sure they understand their FBT obligations.  We will offer concessional treatment to those employers that disclose details of FBT non-compliance before we contact them. But we’ll be taking firmer action in cases where employers are deliberately avoiding their FBT obligations.

www.fbtsurvival.com.au

We are proud to announce that www.fbtsurvival.com.au  is live and available to you!

The site contains key FBT documents, past training materials, checklists, LAFHA food rates and key ATO source materials

 

Highlighting the total FBT + cost of a fully taxable fringe benefit

What is the total cost of a $1,100 taxable fringe benefit?

1.  FBT – $1,056
2.  Payroll Tax – $113 (average)
3.  Workers Compensation – $103 (estimate)
4.  Benefit acquisition (less GST) – $1,000

Total cost = $2,272 = no good for salary packaging!

ATO Get Serious on FBT

Current & Planned Audit activity

1.5,000 PAYG audits
2.400 audits – 34% outside FBT system
3.10,000 education letters – 3% registering for first time
4.Encourage voluntary disclosure
5.Tax agent focus

The future:

1.Cars 62% of revenue – increased data matching
2.FBT education with registration / glove box
3.A new form of FBT audit: Short & Sharp
4.Apply penalties more firmly
5.Falsified logbooks
6.LAFHA audits 12 months away

FBT Returns – common oversights

Frequently overlooked fringe benefits

1.PR costs – application + consulting fee
2.Spouse / family travel
3.Meals provided to non travelling employees
4.Meals provided to non travelling clients
5.Meals provided to non travelling spouses (incl. clients)
6.Health insurance
7.Taxi from “non place of work” to home
8.Visa renewals
9.LAFHA Food – statutory amounts
10.NEW FOR 2013 – Temporary Accommodation

GST & Income Tax issues with 3, 4, 5 & 7

What should I do if I find a mistake (or two) in a prior year FBT Return?

What should I do if I find a mistake (or two) in a prior year FBT Return?

When preparing the current year FBT return you may identify an error in a prior year FBT return. Examples may include:

  1. Incorrect closing odometer reading at 31 March 2012
  2. Car parking spaces provided to employees that were omitted
  3. Failure to include Permanent Residency costs paid for by the employer
  4. Incorrect use of the minor benefit exemption in respect of meal entertainment under the 50/50 valuation method
  5. Failure to include contributions to an offshore pension fund paid on behalf of a resident employee

We suggest the following approach in managing the potential exposure related to prior year mistakes:

  1. Assess if the error is only related to the prior year or multiple years
  2. Assess if the error has resulted in an underpayment or overpayment of FBT
  3. Check if the error/s have resulted in incorrect payment summary reporting
  4. Determine & quantify the full extent of the error
  5. Assess the broader impact on other employer obligations
  6. Determine if a voluntary disclosure and subsequent amendment is required

And let’s not forget, a mistake often means you’ve paid too much FBT – if this the case, then time to apply to the ATO for a refund.

2013 FBT Return Preparation Seminars – Melbourne, Sydney & Brisbane

2013 FBT Return Preparation Seminars – Melbourne, Sydney & Brisbane & some key areas to start thinking about

With an unprecedented number of law changes and increased ATO focus, attending one of our 2013 FBT return preparation seminars is an absolute must do. Our 2013 FBT return preparation seminars will be practical and cover the important law changes for LAFHA, Relocations, Cars, Airline Transport Benefits and In-house Benefits, and how these will impact on your 2013 FBT returns.
We will work through the identification and valuation of all benefit categories, and explain what information and documentation is required to claim an exemption, concession or a reduction.
We are holding three full day FBT return preparation seminars in March 2013. Spaces are limited to maximise learning. The dates, locations and registration links are as follows:
Melbourne, Thursday 14 March – Register online here: http://www.cvent.com/d/dcqx6v/1Q
Sydney, Wednesday 20 March – Register online here: http://www.cvent.com/d/dcqx6v/1Q
Brisbane, Wednesday 27 March – Register online here: http://www.cvent.com/d/dcqx6v/1Q
Alternatively, download and print out the registration form here: http://www.fbtsolutions.com.au/pdf/fbt_return2013_seminar.pdf
Pricing
Early bird – register by 25 January and you only pay $550 including GST.
On time bird – after 25 January, you pay $660 including GST.
Loyal bird – if you or one of your colleagues has previously attended any of our seminars, reduce the applicable fee for each attendee by $55 – that’s our way of saying thank you for your loyalty.

CPD / CPE Hours – 6.5 hours, a certificate in your name will be provided.

Key areas for 2013 FBT Returns
Here are some of the key areas to consider when planning your 2013 FBT return preparation process:

  1. Planning – start the process early, think about the prior year issues and business changes
  2. Prepare a list of updated key contacts – internal and external, and confirm availability
  3. Prepare a timetable of key dates, resources and responsibilities
  4. Law changes – consider the key law changes to LAFHA, relocations, airline transport benefits, cars and in-house benefits. We’ll cover these in detail at the seminars
  5. Car parking – understand where the benefits are being provided, the duration and source the lowest daily rates www.fbtme.com.au – our pricing is competitive, we’ll beat any written quote by 15%.
  6. Training – unless you focus on FBT all year round, then it is recommended that you attend a training session – register here for our full day FBT return preparation seminar: http://www.fbtsolutions.com.au/pdf/fbt_return2013_seminar.pdf or http://www.cvent.com/d/dcqx6v/1Q
  7. LAFHA – understand who received LAFHA, the start and end dates, the food and accommodation components and who was eligible for the transition
  8. LAFHA – for those employees who are eigible for the transition, check that the accommodation allowance is equal to or less than the actual renatl expense
  9. LAFHA – issue declarations now for those who’s LAFHA ended on 30 September 2012. Let me know if you require a template declaration.
  10. Relocations – pull together a list of employees who relocated, either temporarily or permanently and start understanding the circumstances of their relocation and the    remuneration or reimbursement arrangements
  11. New benefits – were new benefit offerings made in 2012 /13?
  12. Cars – start early to understand the cars outside the SFM transitional rules and ensure logbooks are on file and compliant.
  13. Were there any big parties? Start gathering the detailed costings and understanding the nature of the event/s.

Talk to us about your FBT needs. If you have a query, please let us know.

Yours in FBT,

Paul Mather
Director & Registered Tax Agent
FBT, Payroll & Salary Packaging Solutions
T: 02 8079 2924 F: 02 8249 8101 M: 0403 050 358
E: paul.mather@fbtsolutions.com.au
W: www.fbtsolutions.com.au
A: Level 12, 95 Pitt Street, Sydney NSW 2000
P: PO Box 4508, Sydney NSW 2001

LAFHA – what are the changes?

What are the changes?

As we all know, from 1 October 2012, the Living Away From Home rules have been significantly overhauled. Whilst the rules remain in the FBT law, there is an increased requirement to ensure LAFHA payments are properly tracked and categorised. The main changes are as follows:

(a)  The taxation of LAFHA will continue to occur wholly within the FBT regime

(b)  LAFH benefits will only be FBT exempt where the  employee maintains a home in Australia (subject to transitional rules and fly-in-fly-out or drive-in-drive-out arrangements)

(c)  LAFH benefits will only be FBT exempt for the first 12 months of each work location (subject to transitional rules), unless the employee is on a fly-in-fly-out or drive-in-drive-out arrangement

(d)  LAFH benefits will only be FBT exempt to the extent they are actually incurred by the employee and substantiated

(e)  Substantiation provisions require documentary evidence of accommodation and food and drink expenses. Documentary evidence includes:

  1. normal LAFHA – a declaration in an approved format
  2. fly-in-fly-out or drive-in-drive-out arrangement – a different declaration in an approved format
  3. requirement for the employee to substantiate their expenses

(f)   There are transitional rules up to 30 June 2014

  1. Will apply to permanent residents who were LAFH as of 8 May 2012 to access concessional treatment after 1 October even where not maintaining a home in Australia.
  2. Will not apply to temporary or foreign residents after 1 October 2012, unless they are maintaining a home in Australia
  3. The transitional rules are subject to there being no material amendments to the employee agreement

Want to learn more:

2013 FBT Return Preparation Seminars

Registration form:  http://tinyurl.com/8b64uqw or online at: http://www.cvent.com/d/dcqx6v/1Q

Melbourne 14 March – Sydney 20 March – Brisbane 27 March