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Pets, gyms and concert tickets can incur FBT, says ATO

Employers offered a range of benefits during the pandemic that will trigger a tax liability.

Pets, gyms and concert tickets can incur FBT, says ATO
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The Tax Office is focusing on a variety of benefits that may not necessarily be well known, from COVID vaccination incentives to providing their employees with pets as a working-from-home benefit.

The ATO said it expects many employers to have an FBT obligation for the first time due to benefits provided during COVID-19.

Typical fringe benefits include allowing an employee to use a work car for private purposes, paying an employee’s gym memberships or providing tickets to concerts or events.

ATO assistant commissioner Michelle Allen said the ATO had seen more employers providing fringe benefits to their employees because of COVID-19. 

“This includes, paying for items that allow their employees to work from home and providing non-cash benefits as an incentive or reward for employees to get their COVID-19 vaccination,” Ms Allen said.

“We’ve even heard of an employer providing their employees with pets to keep them company while they work at home!

We acknowledge that employers have a lot on their plate, but it is important that employers do the right thing and comply with their obligations, and this includes FBT.”

Ms Allen said the ATO used a range of internal and third-party data sources to identify FBT non-compliance and penalties may be imposed for incorrect or late FBT returns.

“Employers should also understand that in most cases they can claim deductions for the cost of providing fringe benefits and for the FBT they pay,” she said.

“Employers can also generally claim GST credits for items provided as fringe benefits.”

The ATO is urging employers that have provided their employees with fringe benefits to consider their obligations – including registering, reporting, lodging and paying FBT. 

The FBT year runs from 1 April to 31 March. Employers who have an FBT liability for the first time can register for FBT before lodging. Lodgement instructions are available on the ATO’s website.

FBT returns are due by 23 May 2022 (as the usual due date falls on a weekend) for employers lodging their own returns or those lodging by paper. 

Employers lodging through a registered tax professional have until 27 June 2022 to lodge (again, as the usual lodgement due date falls on a weekend).

“Employers that are registered for FBT but don’t need to lodge an FBT return for the year, will need to advise the ATO via a notice of non-lodgment form,” the ATO said.

“Employers who need additional time to lodge are encouraged to speak with their registered tax professional or call the ATO on 13 28 66 from 8am to 6pm, Monday to Friday.”

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