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  • FBT Working Group key messages 11 July 2018

    Minor benefit exemption guidance

    We thanked the participants for the examples they have submitted so far and advised that:

    • Taxation Rulings (TR) 2007/12 and TR 97/17 will be reviewed as a priority.
    • The Board of Taxation has commenced a review of FBT compliance costs.

    Participants agreed that examples illustrating the application of the minor benefits exemption have to be clear. They did not have a preference as to whether clarity is provided in the FBT guide for employers or in our public advice and guidance products. Advice must be practical and clear for employers, particularly in respect of entertainment. Simplicity around record-keeping is very important.

    Action item:

    Provide any issues with current TR 2007/12 and TR 97/17 via email

    Due date:

    31 August 2018

    Responsibility:

    Participants

    FBT return instructions

    The group generally agreed that the FBT return instructions are not problematic. Many tax professionals do not use the instructions.

    The complexity arises in managing and building the information, that is, applying the law to the circumstances of taxpayers, rather than recording figures in the FBT return.

    PCG and TR update

    • Practical Compliance Guideline PCG 2018/3 Exempt car benefits and exempt residual benefits: compliance approach to determining private use of vehicles is the finalised version of Draft PCG 2017/D14 Exempt car and residual benefits: compliance approach to determining private use of vehicles. A compendium of responses to the issues raised has been published.
    • Draft Tax Ruling TR 2018/D2 Fringe benefits tax: benefits provided to religious practitioners – comments are due by 24 August 2018. Taxation Ruling TR 92/17 has been withdrawn, replaced by TR 2018/D2.

    Issues raised by members

    • FBT return and wash up payments – aligning instalment and lodgment dates    
      • the FBT return can only contain FBT instalments, not a wash up payment
      • adding a balancing payment box on the FBT return is costly – this option can be included in any future submission to change labels on the FBT return
      • taxpayers can vary their fourth instalment up, noting the risk of incurring general interest charges (GIC).
       

    Action item:

    Consider extending the payment date of the fourth instalment to align with the lodgment date of the FBT return.

    Due date:

    Next meeting

    Responsibility:

    ATO

    • Extending penalty relief to FBT penalties    
      • examples are required by the project team to consider extending penalty relief to FBT penalties.
       

    Action item:

    Provide examples where penalty relief could be used for FBT.

    Due date:

    Next meeting

    Responsibility:

    Participants

    • Potential annual or bi-annual 'no taxable fringe benefits provided to employees' declaration    
      • the idea of a 'declaration' has been discussed in the ATO and needs to be explored further
      • queried whether the declaration would act similarly to a 'nil-FBT' return in respect of amendment periods – may be considered in any future work on the issue.
       

    Action item:

    Explore the idea regarding declarations and potential impact of a 'nil-FBT' return on amendment periods.

    Due date:

    Next meeting

    Responsibility:

    ATO

    • Link between expense payment fringe benefits and work-related deductions    
      • ATO messaging had been extensive around employees not claiming expenses that had been reimbursed
      • agreed that another box on the payment summary would add a compliance burden on employers.
       
    • Confirmed that the forum is not for legislative proposals or changing the law    

    suggestions for law change can be channelled to the relevant area or participants can share ideas on the Board of Taxation's Sounding BoardExternal Link.

      Last modified: 26 Apr 2019QC 56707