Tax – FBT Checklist

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31 March signals the end of the Fringe Benefits Tax (FBT) year. One of the major causes of FBT non-compliance is the failure of employers to identity benefits that have been provided throughout the year to employees and their associates (e.g. spouses).

In identifying taxable or exempt benefits that have been provided, the best place to start is by reviewing your accounts and ledgers as well as employee staff packages and staff policies. Having done this, proceed to use the following non-exhaustive checklist to further ascertain whether benefits have been
provided in which case an FBT liability may arise:

Motor Vehicle Expenses

  • Have you reimbursed an employee’s motor vehicle expenses during the year?
  • Have you made available a company car to an employee? Note that even where the vehicle is a utility or other ‘work-horse’ vehicle, a residual fringe benefit may arise

Loans

  • Have you provided a loan to an employee during the year or released them from a debt owing to you?

Housing

  • Have you provided an employee with a right to use accommodation which they treat as their usual home?

Living Away From Home Allowance

  • Have you paid an allowance to an employee to compensate them for the cost of expenses incurred because they are required to live away from their usual home for work purposes?

Travel and Entertainment

  • Have you paid or reimbursed an employee for their travel expenses?
  • Did you pay for or reimburse a taxi fare for an employee?
  • Did you provide or reimburse an employee for the cost of meal entertainment or accommodation or travel in respect of that entertainment?
  • Did you provide recreation (e.g. tickets to sporting events) or accommodation or travel in respect of that recreation, or hire or lease entertainment facilities for an employee’s use?

Expense Payments

  • Did you pay for or reimburse an employee for a private expense of theirs (e.g. school fees, home mortgage or rental expenses, health insurance premiums, gym membership etc.)?

Property

  • Did you provide an employee with property (either in-house or external) e.g. goods, services etc.

 

TAKE HOME MESSAGE

If you answered yes to any of the above questions, a fringe benefit may have been provided. FBT exemptions and reductions in value may apply in some circumstances but often rely on your record keeping. You may wish to discuss the implications of this with your accountant as we now near the end of the FBT year.