| Prepare For A Fringe Benefits Tax Audit |
| The Australian Taxation Office (ATO) has shifted its focus from an education role towards a more active role in compliance and accordingly has stepped up Fringe Benefits Tax (FBT) audit activity. |
Consequently, employers will need to be prepared for an FBT audit.
The following areas will be the subjects of the ATO?s main concentration: -
- Employers with FBT attributes who fail to lodge FBT returns. Those employers who have recorded a reportable Fringe Benefits Amount on the payment summaries of their employees, but have not lodged a FBT return will receive the initial focus. Those with a total Reportable Fringe Benefits amount exceeding $3,000 will be selected for review.
- Employers with substantial PAYG withholding amounts (as recorded on the BAS), where not FBT return has been lodged will also be reviewed.
- Referrals from other ATO areas. Other areas of the ATO (especially the GST area) will consider FBT issues when conducting their own business audits. That is Field Officers from non-business audits will be using FBT questionnaires to identify whether businesses are complying with their FBT obligations and particularly in relation to car benefits and expense payment benefits.
Employee Contributions will be reviewed to ensure that employers are correctly recording these amounts for income tax and GST purposes. An employee contribution is an after tax contribution made by an employee to their employer in relation to a fringe benefit, which reduces the taxable value of the benefit for FBT purposes. From an income tax perspective, the GST exclusive amount (where appropriate) of an employee contribution is assessable income to the employer.
Be particularly alert if we prepare your income tax returns, but you lodge your own GST returns. Do you include the year end tax adjustments in your next Business Activity Statement return?
7th-May-2004 |
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