Why should you lodge an FBT return?
Fringe Benefits Tax or FBT is payable on particular benefits provided to employees by their employers. These benefits can include; company cars, holidays or entertainment expenses. If you receive any of these benefits from your employer, you may be required to lodge an FBT return. The amount of tax you pay will depend on the value of the benefit received.
Lodging an FBT return can be complex, so seeking professional advice is essential if you need clarification on your obligations. However, failure to lodge a return when required can result in significant penalties, so it is critical to ensure you know the correct dates for lodgement.
As a reminder, the due date for statutory lodgement and payment of your FBT is May 21st, 2023.
What is FBT, and how does it work?
Fringe Benefits Tax, or FBT, is a tax imposed on certain non-salary forms of employee remuneration. It is calculated on the taxable value of fringe benefits provided by an employer to their employees during the income year and paid at varying tax rates, depending on the nature of the benefit.
Typical benefits subject to Fringe Benefits Tax include:
- Work-from-home expenses.
- Cars and other vehicle allowances.
- Interest-free or subsidised loans.
- Private health insurance premiums.
- Entertainment benefits such as overseas and local holiday travel costs.
Taxes associated with FBT are payable by your employer. That’s why it’s important to remember to lodge your FBT return – as it ensures that those liable for tax fulfil their requirements under Australian law.
Why should you lodge an FBT return?
Lodging an FBT return is a beneficial opportunity for all employers. By filing a return with the Australian Taxation Office (ATO), you can benefit from a range of potential deductions and help ensure compliance with all relevant tax laws.
FBT returns can help businesses reduce their taxable income, which may lead to potential savings directed to other areas of your business.
It’s important to note that failing to lodge an FBT return when required may run the risk of incurring penalties and make you unable to claim legitimate expenses.
What are the benefits of lodging an FBT return?
There are many advantages to lodging an FBT return, including; lower taxation rates, flexible payment options and individualised exemptions.
Furthermore, lodging an FBT return allows employers to manage their tax obligations and proactively obtain maximum benefits. Completing an accurate and comprehensive FBT return assures employers that they are up-to-date with regulations and taxes, saving you time and money in the long run.
How can you ensure that your FBT return is lodged correctly?
To ensure your FBT return is lodged correctly, it’s essential to know the relevant laws and regulations.
Standard ethical practices can ensure accuracy, such as double-checking all calculations or consulting an accountant or tax specialist for assistance. It is critical to remember to submit your FBT return before the due date to avoid any penalties that may result from late submission.
It is also recommended to keep all records and receipts related to the FBT return for at least five years, so you can refer to these at any time to ensure accuracy.
What are the consequences of not lodging an FBT return?
Failure to lodge an FBT return can have serious consequences. For example, companies may be susceptible to penalties and interest charges due to not adhering to their legal obligations for the financial period.
Furthermore, employers may incur significant fines for failing to file, or incorrect filing of FBT returns. Additionally, an employer must lodge an FBT return on time to claim any overpaid taxes, resulting in further financial burden.
Companies should ensure that they are up-to-date with their Australian Taxation Office (ATO) lodgement requirements and deadlines if they wish to avoid additional costs associated with delayed lodgement.
Ensuring accurate and timely Fringe Tax Benefits returns can ensure that your business is operating compliantly and assist in avoiding any possible penalties. Furthermore, lodging an FBT return provides numerous benefits for both your business and employees.
About Sphere Accounting & Advisors-
If you are seeking tax advice, your search ends with Sphere Accountants and Advisors. We consider the complete picture and continually look for ways to improve your financial situation to create, protect and grow your wealth. We apply this approach whether you come as an individual or a business. With a breadth of expertise spanning all aspects of taxation, accounting, financial planning, and more, we can offer a complete solution for all your financial needs.
Our services include accounting and taxation, advisors, financial planning, lending and finance, bookkeeping, and self-managed super fund. The Sphere Group is also CA and CPA Accredited.
Visit our website, call us at (03) 8899 6399, or email us for more details.