Another year has gone by … FBT Year Ends on 31 March – what you need to do

The 2019 FBT year ends on 31 March 2019. (Really?) Yes, that date is not an error as the Fringe benefits tax (FBT) year runs from April to March (unlike the Australian tax year which runs from July to June). It can be confusing at times.

What is FBT?

FBT is the short form for Fringe Benefits Tax. It is a tax imposed on employers who provide certain fringe benefits they provide to their employees, including their employees’ family and associates. The most common FBT benefits provided by employers are the used of cars or utes and entertainment. Click here to see what ATO says about FBT.

Car Fringe Benefits

A car fringe benefit is deemed to have occurred if a car is garaged or kept at or near a place of residence of the employee or associate.  Therefore, if vehicles are not kept at the business premise overnight and are taken home by employees, even if this is for security reasons, a fringe benefit has been provided.

What you need to do if you have Car Fringe Benefits?

All employers providing car fringe benefits, including the use of a commercial vehicle such as a ute, need to ensure that the odometer reading is taken on 31 March 2019.  Other information will need to be provided to determine the value of the benefit provided which can usually be obtained from your accounting records however the odometer readings should be taken as close to 31 March as possible.

Any exemptions available?

There are some FBT exemptions available to employers that may reduce or eliminate an FBT liability. It is important to understand when an exemption may apply and that you have the necessary paperwork needed to support the exemption. The two most commonly used FBT exemptions are:

  1. Minor benefits exemption – very important that benefit is less than $300 and benefit is provided infrequently and irregularly
  2. Exempt Motor Vehicle exemption – commonly known as ute or commercial vehicle exemption.

Other exemptions may be available for your business – see the ATO’s page for the list of exemptions available.

If you would like more information on FBT and FBT exemptions that may apply, please contact our office.