One of the topics we discussed in the August LET’S TALK FBT & SALARY PACKAGING webinar was ATO focus on Small Business, their Tax Agents, and FBT Audit activity.
Here is a link to the webinar recording: Let’s Talk FBT & Salary Packaging
I wanted to share with you important information to provide “real life” context to the topic. Whilst many people believe that the ATO do not conduct FBT audits – this is a very old myth. The ATO are actively conducting FBT Audits.
Who do the ATO select for an FBT Audit?
Here are some common examples of businesses that are selected for FBT Audit, including:
- Businesses with one or more registered motor vehicles
- Businesses who are not registered for FBT
- Businesses who have not lodged FBT returns
- Businesses who have not declared employee contributions in their income tax returns
- Businesses who have not remitted GST on employee contributions in their BAS
What information do the ATO require for the FBT Audit?
The ATO information request for an FBT Audit can be extensive. Some of the information requested is often not even directly related to FBT. Examples of the information requested by the ATO for an FBT Audit, includes:
- Reason why you have not lodged FBT returns
- Financial Statements
- Detailed tax reconciliation of accounting profit to taxable income
- Depreciation schedule and calculations for motor vehicles
- Motor vehicle information including purchase invoices, leasing documentation, service records, logbook records, odometer records including opening and closing odometer records for each FBT year, driver name, address where the motor vehicle is normally garaged, sale date and sale information if relevant
- Details of employee contributions including journal entries and general ledger accounts
- Details of GST remitted on employee contributions
To download the sample ATO FBT Audit letter, please click here: Sample ATO FBT audit letter
To download the ATO FBT Checklist, please click here: Sample ATO FBT audit letter
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