Amending the FBT return
Performing a post-lodgment review may identify an error that requires the FBT return to be amended.
If an entity determines that an amendment to its FBT return is required, the entity should write as soon as possible to the ATO either requesting an amended assessment, or lodging an objection against the assessment.
The request, which must be dated and signed, should include:
- whether it is an amendment request or an objection
- the name of the employer
- the tax file number of the employer
- the name, address and telephone number of a contact person
- the year of the assessment
- the reason(s) for the amendment (or grounds of objection)
- whether the benefits are type 1 or type 2
- the exact adjustment to each benefit type, including the corrected taxable values.
Lodgment of the FBT return is deemed to be an assessment.
The time limits for requesting an amendment to the assessment depend on whether the requested amendment will result in a reduction or increase in FBT payable.
A taxpayer can only request an amendment to reduce the FBT payable within three years of the date the FBT return was lodged.
Where an amendment is requested by an entity, the entity has three years from the date of the issue of the amended assessment to request further reducing adjustments in relation to the item that was the subject of the amended assessment.
Amendments to increase the FBT payable by the entity, either as a result of voluntary disclosure or following a ATO review, are able to be made within six years of the lodgment of the return.
The ATO has the general power to amend any assessment within three years. In cases where tax has been avoided or where there has not been full and true disclosure, the ATO can amend the assessment within six years of lodgment or subsequent amendment of the particular return.
In cases of fraud or evasion, there is no time limit within which the ATO can amend an assessment.
Any objection against an assessment must be lodged within four years.
Revised notification of RFBA amounts
If an error in an entity's FBT return affects RFBAs and employee payment summaries have already been issued, entities are required to issue a new payment summary, marking the 'amending a payment summary statement' box. There is no need to issue a new payment summary if the payment summary understates an employee's RFBA by $195 or less (as per Chapter 5.9 of the Fringe benefits tax - a guide for employers).
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 income tax return or advise relevant government agencies based on the payment summary issued. Any delay may result in additional administration and inconvenience for employees.
Entities are not legally required to help employees with a request to amend their income tax return or advise other relevant entities of the change to their RFBA. However, given that the employee is required to take such action as a result of an error made by the entity, entities may consider it appropriate to provide general assistance to employees. This may include providing a reference to the ATO web page dealing with income tax return amendment requests. Entities may also consider providing general guidance to employees in relation to the other entities that employees may need to tell about a change to their RFBA, such as the Child Support Agency or Centrelink.
New payment summaries are required whenever an entity amends its FBT return that results in a change to RFBA amounts. This may mean that employees are required to adjust earlier year income tax returns and have other prior-year liabilities and entitlements adjusted.