FBT year end to do list
- Odometer reading of each vehicle at 31 March 2012;
- Details of any days when vehicles were unavailable for private use and not kept on employee's premises (e.g. when vehicles are undergoing substantial repairs);
- If a log book has been maintained for any vehicles during the year, it should be completed over a period representative of the car's business use (please note that log books are only valid for a maximum period of 5 years and must be updated before the expiration of that period to ensure the correct calculations are made, for details see below);
- Details of any cars that were sold and purchased during the year;
- Details of employee use of each car available and for what number of days;
- Details of any salary sacrificing arrangements which must have been finalised and completed by 31 March 2012.
Motor Vehicle Log Books
These records must be maintained for a minimum continuous period of 12 weeks. The log book must at least include:
- the date the business journey began and ended;
- the odometer reading at the beginning and end of the business journey;
- the purpose of the journey; and
- the number of kilometres travelled in the course of the journey.
It is imperative that all entries in the log book are made at the end of the journey or as soon as reasonably practicable after the journey. Using a log book usually ensures the best possible outcome can be achieved.
The ATO has regularly emphasised the importance of maintaining accurate and sufficiently detailed records when an employer provides a car fringe benefit to an employee. In particular, log books must be detailed, clearly stating the purpose of each journey. To state “business” is regarded as insufficient by the ATO.
Expense Payment Benefits
You may provide an expense payment fringe benefit if an employee incurs expenses and:
- you reimburse them for the expenses, or
- you pay a third party for the expenses.
Records of these expenses need to be kept for FBT purposes. If any one of these expenses would have been deductible to the employee (e.g. income protection insurance, work related expenses), then appropriate declarations need to be obtained from the employees to that effect. If the expense is partially work-related (e.g. telephone costs), then declarations from the relevant employees need to be obtained specifying the work-related portion of the expense. Please contact your Ruddicks adviser to obtain details of the format of declarations accepted by the ATO.
Make sure you obtain any declarations from employees before the due date of lodgement your FBT return or, if you are not required to lodge a return, by 21 May 2012.
Exempt expense payment benefits
You don't have to pay FBT on certain expense payment fringe benefits. Some examples are listed below.
- Payment of taxi travel expenses is an exempt benefit if the travel is a single trip beginning or ending at the employee's place of work, or arises as a result of sickness or injury to the employee.
- Other non-work related taxi travel generally gives rise to an expense payment fringe benefit.
- Mobile phone expenses - payment of mobile phone expenses where the mobile is primarily for use in the employee's employment is an exempt benefit;
- Laptop Computers and tablets - one laptop computer and one tablet (e.g. iPad) per employee per year are an exempt benefit, where these items are used primarily for work-related purposes.
- The costs of providing newspapers and periodicals to employees for business purposes are exempt benefits. The exemption does not apply where the business use is merely incidental.
- A subscription to a trade or professional journal, or an entitlement to use an airport lounge membership.
Some minor benefits you provide may be exempt from FBT. This may be the case where the value of the benefit is less than $300 and the benefit is not provided on a frequent and/or regular basis.
Living Away From Home Allowance (LAFHA)
If you pay an employee a living away from home allowance, you are providing a fringe benefit. For FBT purposes, a living away from home allowance is an allowance you pay to an employee to compensate them for any additional expenses they incur and disadvantages they suffer because they are required to live away from their usual place of residence to perform their work-related duties. Additional expenses do not include expenses the employee can claim as an income tax deduction.
Details of such allowances are to be kept in order to calculate your FBT liability in relation to LAFHA payment.
If you have any concerns in relation to your FBT exposure and obligations, please contact your adviser at Ruddicks to discuss your concerns and how we can help.