FRINGE BENEFITS TAX ("FBT") - MARCH 2020

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The FBT year ends on 31 March 2020 and each employer is required to calculate their liability for FBT. Where a liability for FBT exists, an annual return is required to be lodged and any tax paid by 21 May 2020. However, if the return is lodged electronically by a Tax Agent the due date of lodgement is 25 June 2020 while the payment due date is 28 May 2020.

2019 FBT YEAR – RATES AND THRESHOLDS

2020 rates 2019 rates
FBT rate 47% 47%
Gross up rates-Type 1 2.0802 2.0802
Gross up rates--Type 2 1.8868 1.8868
Interest rate on loan fringe benefits 5.37% 5.20%
Car parking benefit threshold $8.95/day $8.83/day

2020 Living Away from Home Allowances:

ATO guidelines (excerpt) for reasonable food and drink-within Australia

$Per week
One adult 269
Two adults 404
Three adults 539
One adult and one child 337
Two adults and one child 472

VEHICLES

We remind you that where motor vehicles are provided to employees or their associates for their private use, odometer readings must be recorded as at 31 March 2020 for each motor vehicle.

Guidelines for exempt vehicle benefits (i.e. commercial vehicles)

The ATO have recently issued further guidance to employers who provide work vehicles to employees and those vehicles are typically considered commercial in nature (e.g. panel vans, utility or other commercial vehicles not designed principally to carry passengers).

Many employers incorrectly believe that because these vehicles are “commercial” in nature there is no FBT liability to consider. This is not the case. Even if a vehicle is on the ATO list of approved commercial vehicles, an FBT liability may still arise.

The guidelines state that private use of these vehicles must be restricted to travel between home and work (and back) and that any diversion in travel must add no more than 2km’s to the journey (e.g. picking up kids from school etc). In addition, the vehicle must not travel more than 1,000kms per year (previously 750km) in private usage (e.g. holidays) and no single journey for private purposes can exceed 200km’s. If the vehicles private usage exceeds these guidelines an FBT liability may arise.

If you have provided commercial vehicles to employees we strongly encourage you to speak with us concerning your potential FBT liability for these vehicles.

If you have any queries in respect of your potential FBT liability or would like StewartBrown to perform a FBT ‘health check’ on your business, please contact one of the StewartBrown Managers or Partners to discuss.

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