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  • Engage with stakeholders

    There are a number of key stakeholders involved in your government organisation's management of FBT other than those that have responsibility for the administration of FBT, including:

    • individual employees that receive benefits that may be fringe benefits
    • other work areas
    • service providers
    • the ATO.

    Communicating with internal stakeholders

    Employees

    Obtaining information from employees

    Government organisations should ensure that all benefit information is collected, reconciliations performed and adjustments made before an employee leaves the organisation and before the end of each FBT year. This includes collecting closing odometer readings of a salary packaged car on the date that the employee is taken to have ceased employment or at the end of the FBT year.

    Your organisation will also need to ensure that it obtains all employee declarations from employees no later than the day on which its FBT return is due to be lodged.

    See also

    Reportable fringe benefit amounts (RFBAs)

    Given that RFBAs are recorded on employees' payment summaries and the effect that RFBAs may have on the financial position of employees, it is important that employees are fully informed of the RFBA implications of receiving fringe benefits. This is particularly relevant where they home-garage your government organisation's car or are required to live away from home. The nature and extent of the information provided will vary depending on the types of benefits provided and whether salary packaging is provided in-house or by an external provider.

    FBT information could be provided through:

    • induction training
    • newsletters
    • the intranet
    • other communication methods generally used by your organisation.

    Organisations that provide a large number and/or various types of fringe benefits should consider establishing an FBT issues database and/or assigning a staff member to be an FBT contact (for example the FBT manager) to provide employees with detailed information relating to FBT.

    RFBAs will need to be available to enable payment summaries to be issued (if required) no later than 14 July. Government organisations should establish arrangements for notifying employees of their RFBA as early as possible (preferably by mid-June), so that once RFBAs are finalised, employees can be notified promptly. This enables employees to review the amount and if necessary, seek clarification. It also acts as an additional review of the FBT data.

    New payment summaries should be prepared and issued as soon as possible after an error is identified. It is the employee's responsibility to amend, as necessary, their tax return or advise relevant government agencies based on the payment summary issued.

    See also:

    Single Touch Payroll and payment summaries

    Single Touch Payroll does not change your government organisation's obligation regarding FBT returns and payments.

    It is optional for government organisations to report RFBA via Single Touch Payroll either throughout the year through a payroll event report, or by 14 July using the update service.

    If your organisation does report these amounts and has made a declaration to the Commissioner by 14 July that its reporting for the year is final, your organisation will not have to provide payment summaries to its employees, or a payment summary annual report to the Commissioner.

    See also:

    Other work areas

    A number of work areas within your government organisation may make decisions as part of their roles or responsibilities that have an impact on your organisation's FBT liability or administration. The needs and expectations of these areas should also be managed to ensure that your organisation is compliant with its FBT obligations.

    Finance area/managers responsible for budgets

    As FBT can effectively double the cost of providing a fringe benefit, it is important this is factored in budgets developed by your finance area or different work area managers that are responsible for their own individual budgets.

    Human resources work area

    Your government organisation's human resources work area or managers of different work areas may make decisions regarding remuneration and the provision of benefits that have an FBT impact. Your organisation should ensure that these areas and managers recognise any potential FBT implications of their decisions and have a process for obtaining assistance in relation to FBT issues.

    Ultimate responsibility for FBT obligations remain with the relevant state or territory. However, states and territories can transfer the administration and payment of FBT to a departmental level. As a result, it is important that your organisation is aware of any changes at the departmental levels or other structural changes that result in new departments being created or departments merging as this could impact on your organisation's FBT liability. Regular communication with your organisation's human resources work area and other work areas is important to know when such changes are likely to occur.

    See also:

    Fleet management work area

    The fleet management work area (responsible for managing your organisation's vehicle fleet) need an understanding of the FBT implications of providing a vehicle for private use (such as home-garaging a car) and the classification of journeys, and be able to explain this to other employees within your organisation. There should be a process available for the fleet management work area to engage with those responsible for FBT within your organisation frequently to resolve potential issues and to ensure there is constant communication to enable the exchange of any information.

    Communicating with external organisations

    Other Australian government organisations

    It may be necessary to communicate with other Australian government organisations to provide details of fringe benefits provided to the employees of the associated entity, or to clarify responsibilities where structural changes have resulted in employees being transferred between organisations during the year.

    Service providers

    Government organisations generally rely on information provided by a number of external service providers in preparing their FBT return. This may include fleet providers and salary packaging providers.

    Prior to the commencement of each FBT year or at the time of entering into contractual arrangements with an external service provider, your organisation should:

    • gain an understanding of the processes and controls used by these providers to ensure that the information received from them is correct
    • agree with the service provider on the form that data should take to enable it to be easily imported into your government organisation's FBT return preparation process
    • obtain an outline of the processes and associated controls the external service provider has and assess whether they are adequate to produce accurate data
    • agree a timetable for data to be provided to enable the timely preparation of the FBT return.

    Technical advisers

    Government organisations may seek advice from an external tax adviser on the FBT implications of providing different types of benefits and on any other issues that should be considered. In addition, technical advisers may be engaged to ensure that any changes to legislation, ATO views or case law that impacts on your organisation's FBT administration are identified, and to assist in your organisation's interactions with us in seeking advice or responding to our requests.

    When an external service provider is engaged to provide advice, or to help your organisation meet its FBT obligations, the exact nature of the services to be provided, the costs, and the timeframes should be discussed and included in a contract.

    Communicating with the ATO

    Government organisations interact with us in various ways in respect of their organisation's FBT compliance.

    Your organisation should identify a key member from your organisation (for example, the staff member assigned with overall responsibility for FBT) to have authority to interact with us. This staff member should take a proactive approach to building an effective relationship with us and have input into steering committees or other networks (for example, the States and Territories Industry Partnership) offered by us and provide comments in response to consultation matters that impact on your organisation's administration of FBT.

    Where the FBT treatment of an item is unclear, organisations should take steps to clarify the position as soon as possible by engaging with us early. Your organisation should also engage with us if it is unclear as to how an ATO view applies to the specific facts and circumstances of your organisation or if the facts and circumstances described in your private or class ruling have changed.

    Where your organisation identifies a mistake, or left something out, on the FBT return it should request an amendment from us. If your organisation disagrees with a decision we have made about its FBT obligations you can object to our decision. Alternatively, our in house facilitation service is ideal to assist with resolving less complex disputes and can be used at any stage from audit up to litigation.

    See also:

    Next steps:

      Last modified: 06 Feb 2018QC 18627