FBT issues on the ATO’s radar

The ATO has updated its list of ‘What attracts our attention’, with six items that specifically relate to fringe benefits tax (‘FBT’), as follows:

• Failing to report motor vehicle fringe benefits, incorrectly applying exemptions for vehicles or incorrectly claiming reductions for these benefit
• Incorrectly calculating car parking fringe benefits due to: –

–     significantly discounting market valuations;

–     using non-commercial parking rates; or

–     parking rates not being supported by adequate evidence.

• Mismatches between the amount reported as an employee contribution on an FBT return compared to the income amounts on an employer’s tax returns
• Claiming entertainment expenses as a deduction but not correctly reporting them as a fringe benefit, or incorrectly classifying entertainment expenses as sponsorship or advertising.
• Not reporting fringe benefits on business assets that are provided for the personal enjoyment of employees or associates.
• Not lodging FBT returns (or lodging them late) to delay or avoid payment of tax.