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

The 2020 FBT year ends on 31 March 2020. (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 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.

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Myths About Utes and FBT

There are a lot of myths around Utes and FBT, some of which may be spreading by “mates” at the bar, or during a smoko. Not all the myths are true, let’s look at some of them here:

Is my ute automatically exempt from FBT?

No. It is important to note that a vehicle that does not satisfy the definition of a ‘car’ such as a ute is not automatically exempt from FBT.

When is the private use of my car exempt from FBT?

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Maximize your tax deduction – Individuals

As 30 June is fast approaching, this is the best time to review your situation to see if you are able to maximize your income tax deduction to get back more tax refund (or reduce your tax liability) when lodging your 2018 tax return!

This article will focus on what individuals can do to legally maximize their tax deduction to minimize income tax liability. We will look into some work-related expenses, donations, tax agent fees, personal super contributions and income protection insurance in this article.

There will be a separate article for business owners so keep an eye on our website!

Note that we are only providing general advice on what items you may be able to claim as your tax deduction, the actual tax deductibility for certain items depend on your personal circumstances. If you would like assistance for your situation please contact us.

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FBT Updates & Reminder – Exempt Vehicle

The following article applies to those who use motor vehicles in the course of running their businesses.

FBT Motor Vehicle Exemption – Updated Guidelines

For many years, many entities have enjoyed a FBT exemption where:

  • the vehicle is a panel van, utility (ute) or other commercial vehicle (that is, one not designed principally to carry passengers)
  • the employee’s private use of such a vehicle is limited to
    • travel between home and work
    • travel that is incidental to travel in the course of duties of employment
    • non-work related use that is minor, infrequent and irregular (eg: occasional use of the vehicle to remove domestic rubbish).

These have been a grey area and have caused confusion to business owners when attempting to work out whether their vehicles are exempt or not.

The ATO has recently released new guidelines to reduce confusion and provide more certainty for employers when applying the FBT exemptions. The guidance notes relate to the clarification on the definition of an employee’s (and/or their associate’s) private use where it is ‘minor, infrequent and irregular’ for FBT purposes.

If you believe you fall under this category and would like more clarity, contact us for more information and we can talk you through this over the phone, or via email.

2018 FBT Return Lodgement

The FBT year has ended 31 March 2018. For those who require a return lodgement, your FBT Return is due by 21 May 2018. Please contact us for instructions on the lodgement of the return.

Motor Vehicle Odometer Readings

For those who provide motor vehicle benefits to employees and/or associates, it is important that you keep records of your vehicle’s odometer reading as at 31 March 2018.

Work-related car expenses – what can you claim?

Do you know what you are allowed to claim when you use your car for work?

Check out a few frequently asked questions and answers here.

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