The ATO commenced a series of LAFHA FBT audits last year. Here are the types of questions they asked:
3 areas of FBT exemptions and concessions to consider:
Step 1 – Relocation costs
Storage and removal of goods
Relocation transport including familiarisation trips
Connection of utilities
Step 2 – Temporary accommodation
Up to 12 months free of FBT
Step 3 – Sale of former residence / purchase new residence
Exemption for stamp duty and incidental selling & acquisition costs
Car parking is an excellent benefit to package for a number of reasons:
With the new rates applicable from 10 May 2011, subject to transitional rules, it is necessary for the FBT return preparer to determine for each car:
- What set of statutory fraction rates apply for 2012
- What set of statutory fraction rates will apply from 1 April 2012 due to a new committment occurring in 2012
This will be quite a challenge, not just for 2012, but for 2013 and 2014 FBT years.
For all new committments (between 11 May 2011 and 31 March 2012), then the new transitional will only start to apply from 1 April 2012.
With the FBT year end upon us, it’s time for employers to start thinking about managing their FBT liability on car parking provided to their employees. The following steps need to be considered:
Step One – Confirm all parking facilities
The first step is to confirm all parking locations, whether leased, owned or otherwise provided. The biggest risk for employers is not identifying the benefits.
Step Two – Identify the number of individual benefits
For each location, identify the number of spaces, and the date a benefit has been first provided and last provided in the FBT year.
Step Three – Perform a valuation survey to determine if a car parking fringe benefit exists
A car parking fringe benefit will only exist if a commercial car parking station, within a 1km radius, charges above the threshold of $7.71 for 2012 at 1 April 2011.
Step Four – Determine the number of benefits
The most common method for determing the number of benefits is to use the statutory formula method which deems there to be 228 days where a benefit is provided in a full FBT year (pro-rata for a part year). If you haven’t considered before, seriously contemplate use of the 12 week register method for car parking.
Step 5 – Value the benefit
The average cost method is the easiest and most common method. However, it is necessary to perform a valuation survey at both 1 April 2011 and 31 March 2012. As the latter is on a Saturday, it will be necessary to undertake the survey on Friday 30 March.
Make it easy and order here: http://www.fbtme.com.au/order.html
Step 6 – Calculate the FBT liability and complete the FBT return
Step 7 – Consider if you’ve paid too much FBT historically? Under the self assessment system, employers have the right to claim FBT refunds going back 3 years.