The ATO has indicated that the 2011 compliance program will include a review of Fringe Benefits in four (4) particular areas.

They are:-

• Failing to identify taxable benefits, particularly motor vehicles.
• Failing to value correctly those benefits
• Failing to lodge returns, and
• Taking advantage of grey areas in the law

In particular, the ATO intends to focus on luxury car purchases and the grey area of dual cab utilities, when private use has not been appropriately recognised.

Since Fringe benefits Tax is an expensive alternative to income tax and GST, it is worth reviewing the basis of all calculations, declarations, log books and basic documentation.

Whilst there might be an exemption for private use of a dual cab utility, if the declaration is not signed by the relevant employee(s), then the exemption will not apply.

In circumstances where a certificate or a declaration is required, it is a relatively simple test for an auditor to deny an exemption, yet it is also relatively simple to get it right.  Quite an expensive cost for not meeting the requirements.

A review of Fringe Benefits Tax returns or obligations is worthwhile before starting on the 2011 tax return obligations.