FBT Solutions

02 8079 2924

Month: January 2013


In light of the recent legislative changes, developing a policy for LAFHA & Relocations policy is not an easy task. Here’s a few key points I hope will help.

The following require consideration:

1.            The application or not of the transitional rules (generally only applies to permanent residents)

2.            In relation to accommodation, the substantiation requirements are such that it will be necessary to obtain evidence of actual payment

3.            Where the accommodation allowance is greater than the actual expense, the excess is subject to FBT

4.            Contracts will need to clearly show the split between accommodation & food components

5.            Where the food component is greater than the ATO reasonable amounts, it will be necessary to obtain full substantiation from the employee

6.            Where the food component is greater than the ATO reasonable amounts, it is recommended that the excess be categorised as an incidental allowance

7.            Where the accommodation component is greater than the actual expense, it is recommended that the excess be categorised as an incidental allowance

In regards to declarations, whilst these will be required, it will also be necessary to obtain substantiation for the accommodation expenses and possibly the food.

 


What should I do if I find a mistake (or two) in a prior year FBT Return?

When preparing the current year FBT return you may identify an error in a prior year FBT return. Examples may include:

  1. Incorrect closing odometer reading at 31 March 2012
  2. Car parking spaces provided to employees that were omitted
  3. Failure to include Permanent Residency costs paid for by the employer
  4. Incorrect use of the minor benefit exemption in respect of meal entertainment under the 50/50 valuation method
  5. Failure to include contributions to an offshore pension fund paid on behalf of a resident employee

We suggest the following approach in managing the potential exposure related to prior year mistakes:

  1. Assess if the error is only related to the prior year or multiple years
  2. Assess if the error has resulted in an underpayment or overpayment of FBT
  3. Check if the error/s have resulted in incorrect payment summary reporting
  4. Determine & quantify the full extent of the error
  5. Assess the broader impact on other employer obligations
  6. Determine if a voluntary disclosure and subsequent amendment is required

And let’s not forget, a mistake often means you’ve paid too much FBT – if this the case, then time to apply to the ATO for a refund.


Reportable Fringe Benefits FBT Return checklist questions:

The reporting of benefits on employee payment summaries is an important obligation and requires careful review. Failure to report correctly can result in ATO penalties and unhappy employees.

  Reportable Fringe Benefits – have you considered the following:

Y/N

1 Have you excluded meal entertainment & entertainment facility   leasing benefits?  
2 Have you included recreational or other entertainment?

Examples being tickets to sporting & cultural events, holidays   and games of golf

 
3 Have you excluded car parking fringe benefits and pooled or shared cars?  
4 Have you included reportable spouse and other associates benefits   with the employee reportable amounts?  
5 Don’t forget, benefits excluded from the reportable requirements may   still be subject to FBT  

 


2013 FBT Return Preparation Seminars – Melbourne, Sydney & Brisbane & some key areas to start thinking about

With an unprecedented number of law changes and increased ATO focus, attending one of our 2013 FBT return preparation seminars is an absolute must do. Our 2013 FBT return preparation seminars will be practical and cover the important law changes for LAFHA, Relocations, Cars, Airline Transport Benefits and In-house Benefits, and how these will impact on your 2013 FBT returns.
We will work through the identification and valuation of all benefit categories, and explain what information and documentation is required to claim an exemption, concession or a reduction.
We are holding three full day FBT return preparation seminars in March 2013. Spaces are limited to maximise learning. The dates, locations and registration links are as follows:
Melbourne, Thursday 14 March – Register online here: http://www.cvent.com/d/dcqx6v/1Q
Sydney, Wednesday 20 March – Register online here: http://www.cvent.com/d/dcqx6v/1Q
Brisbane, Wednesday 27 March – Register online here: http://www.cvent.com/d/dcqx6v/1Q
Alternatively, download and print out the registration form here: http://www.fbtsolutions.com.au/pdf/fbt_return2013_seminar.pdf
Pricing
Early bird – register by 25 January and you only pay $550 including GST.
On time bird – after 25 January, you pay $660 including GST.
Loyal bird – if you or one of your colleagues has previously attended any of our seminars, reduce the applicable fee for each attendee by $55 – that’s our way of saying thank you for your loyalty.

CPD / CPE Hours – 6.5 hours, a certificate in your name will be provided.

Key areas for 2013 FBT Returns
Here are some of the key areas to consider when planning your 2013 FBT return preparation process:

  1. Planning – start the process early, think about the prior year issues and business changes
  2. Prepare a list of updated key contacts – internal and external, and confirm availability
  3. Prepare a timetable of key dates, resources and responsibilities
  4. Law changes – consider the key law changes to LAFHA, relocations, airline transport benefits, cars and in-house benefits. We’ll cover these in detail at the seminars
  5. Car parking – understand where the benefits are being provided, the duration and source the lowest daily rates www.fbtme.com.au – our pricing is competitive, we’ll beat any written quote by 15%.
  6. Training – unless you focus on FBT all year round, then it is recommended that you attend a training session – register here for our full day FBT return preparation seminar: http://www.fbtsolutions.com.au/pdf/fbt_return2013_seminar.pdf or http://www.cvent.com/d/dcqx6v/1Q
  7. LAFHA – understand who received LAFHA, the start and end dates, the food and accommodation components and who was eligible for the transition
  8. LAFHA – for those employees who are eigible for the transition, check that the accommodation allowance is equal to or less than the actual renatl expense
  9. LAFHA – issue declarations now for those who’s LAFHA ended on 30 September 2012. Let me know if you require a template declaration.
  10. Relocations – pull together a list of employees who relocated, either temporarily or permanently and start understanding the circumstances of their relocation and the    remuneration or reimbursement arrangements
  11. New benefits – were new benefit offerings made in 2012 /13?
  12. Cars – start early to understand the cars outside the SFM transitional rules and ensure logbooks are on file and compliant.
  13. Were there any big parties? Start gathering the detailed costings and understanding the nature of the event/s.

Talk to us about your FBT needs. If you have a query, please let us know.

Yours in FBT,

Paul Mather
Director & Registered Tax Agent
FBT, Payroll & Salary Packaging Solutions
T: 02 8079 2924 F: 02 8249 8101 M: 0403 050 358
E: paul.mather@fbtsolutions.com.au
W: www.fbtsolutions.com.au
A: Level 12, 95 Pitt Street, Sydney NSW 2000
P: PO Box 4508, Sydney NSW 2001