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Fringe Benefits Tax Returns

A reminder that if you have employees (including yourself as a company director/ secretary, if applicable) and you provide motor vehicles, car parking, entertainment including food and drinks, employee discounts, loans, phone and/or internet access, or the reimbursement of private expenses, then you are likely to be providing a fringe benefit and will need to lodge a 2023 Fringe Benefits Tax Return. 

We recently forwarded Fringe Benefits Tax Return engagement letters to clients we know need to lodge FBT Returns, however, there may be some of you who need to lodge a 2023 FBT Return for the first time this year. If that’s the case, please contact us and we can discuss your situation. You have until the 21st of May 2023 to be added to our FBT client lodgement list. 

Why lodge an FBT Return?

The Tax Office is increasingly focused on closing gaps between what it believes it should be receiving in tax payments and what is currently being declared and remitted by taxpayers. As the FBT tax gap is approximately 20%, the ATO has advised it is applying more review and audit resources to this area of taxation compliance. 

Lodging an FBT Return – even if it’s $Nil – restricts the ATO’s audit window to only three years from the date of lodgement. Otherwise, the ATO can go back an unlimited number of years and possibly find areas where they will charge you FBT, interest and penalties. Worse still, an FBT review or audit could open the door to reviews/audits in other areas such as GST or Superannuation Guarantee, potentially compounding the pain. Since audits and reviews can be expensive on a taxpayer’s part, and we want to safeguard you as much as possible from any such activity, we recommend doing what you can to limit your exposure to this risk.