FBT 2024: understanding Fringe Benefits Tax
It’s Fringe Benefits Tax (FBT) season again! Whilst legislative changes are minimal this year, a good understanding of FBT is crucial for compliance and accurate reporting. So read on for what you need to know going into the FBT 2024 season and what lies ahead for next year.
FBT 2024 Due Dates
Mark Your Calendar
Don’t let important deadlines sneak up on you. FBT return due dates for 2024 are:
- Paper Lodgers: May 21st, 2024
- Electronic Submissions: June 25th, 2024
FBT Exemption for Electric Cars
Drive Green
In a bid to promote environmentally friendly practices, the government has offered FBT exemption for certain electric vehicles (EVs) since 2022. And, it continues into 2024.
Make note: nuances exist, particularly for second-hand EVs, and it’s critical you’re meticulous in your record-keeping and able to substantiate claims. You’ll also need to calculate the taxable value accurately and report it appropriately to avoid any unforeseen tax implications.
Is your car exempt from FBT?
Under this exemption, employers may provide eligible EVs to their employees for private use without attracting FBT, as long as they meet all the following conditions:
- It’s a zero or low emissions car* – a battery electric, hydrogen fuel cell electric, or plug-in hybrid electric car.
- The car was first purchased and used on or after July 1, 2022.
- The car is used by a current employee or their associates (yes, that includes family).
- The car wasn’t hit with Luxury Car Tax (LCT) when it was purchased.
* The exemption is only valid for cars. That is: a vehicle that’s designed to carry less than one tonne and fewer than 9 passengers, including the driver.
Sadly – other electric vehicles, like motorcycles, scooters or e-bikes, do not qualify for this exemption.
EV Home Charging Rate Guidance
Guidance on the EV home charging rate has also been finalised, providing clarity on electricity costs for charging EVs at home. Adhering to the provided methodology is essential, especially concerning plug-in hybrid vehicles, to accurately calculate FBT obligations. You can access the full Practical Compliance Guideline here.
Car Parking Benefits Updates
Recent updates offer expanded interpretations and guidance on car parking benefits, reflecting changes in legislation and ATO rulings.
Understanding these nuances can help navigate FBT obligations effectively and ensure compliance.
Reach out to your advice team for more information.
Alternative Records for FBT Reporting for 2025
Keeping track of FBT records can be a daunting task, but fret not.
Recent legislative changes now allow employers to rely on alternative records for their FBT returns in the 2025 FBT year (1 April 2024 to 31 March 2025).
This means you can streamline your record-keeping process by using existing corporate records (e.g. employment contracts, payroll records, logbooks, hotel receipts, emails and text messages), where applicable.
Stay tuned for guidance from the ATO for more on which records qualify under this new provision. Or, reach out to your advice team for help.
Common FBT Errors
In the world of FBT, simple errors can lead to big headaches down the track.
Is that worker an employee or an independent contractor? How and when does that home-office item trigger FBT for your employees working from home?
Pay close attention to things like motor vehicle classifications and keep an eye on employee contributions to ensure they’re reported accurately.
These simple (yet common) errors can raise red flags with the Tax Office, and spark reviews and audits.
ATO Compliance Focus
As we roll into the 2025 FBT reporting cycle, compliance remains a priority for the ATO. The Tax Office is focused on correcting errors and ensuring accurate reporting.
So be vigilant in identifying fringe benefits, calculating taxable values, and meeting reporting deadlines to avoid penalties.
Stay Informed, Stay Compliant for FBT 2024
As the FBT return due dates approach in May and June 2024, staying informed and adhering to guidelines really is your best defence against compliance issues.
Whether you need assistance with record-keeping, compliance, or understanding the latest legislative changes, we’ve got you covered.
