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Hello «casual»
URGENT ATTENTION
RE: 20xx FRINGE BENEFITS TAX RETURN
1ST APRIL 20xx TO 31ST MARCH 20xx
Fringe Benefits Tax (FBT) is one of the areas clearly highlighted by ATO as one
of its key audit focus area for 20xx. Entities that fail to lodge FBT returns
accurately and in time may be considered “high-risk” by ATO and are more likely
to be audited. This means that the FBT return is required to be prepared
accurately and in a timely manner.
You may be liable for FBT for the above period. The flow chart below illustrates
the action you are required to take in order to comply with your FBT obligation.
Do you require us to
assess
your
FBT
liability/status?
Yes
Please record odometer reading as at 31st
March 20xx for motor vehicles, complete &
sign the “Confirmation Form”, “Car Expense
Summary” & “Other Fringe Benefits Summary
Checklist”, if applicable, & send them back to
us on or before 21 April 20xx.
Once we send you your 20xx FBT
Return & option form, please
complete the option form and the FBT
Return and mail them to us before 14
May 20xx.
No
Please sign the attached
“Confirmation Form” and
mail it back to us on or
before 21 April 20xx.
If you engage us to work out your FBT liability/status, please SIGN AND MAIL
the attached “Confirmation Form” and the “Car Expense Summary” to us on or
before 21 April 20xx so that we can calculate your FBT liability. Please note that
our fees for preparing and lodging a standard FBT return (with two or less
benefits) is $450.00 plus GST. Fees for preparing FBT returns with more than
two benefits will be based on the time spent on the job.
CAR FRINGE BENEFITS
Car fringe benefit accounts for more than 44% of all FBT revenue collections.
Even if your situation is the same as last year, i.e. you are using the same car
and the same car’s business percentage, your FBT liability this year may be
different due to the period of time the car is owned by the business. In any case,
commissioning us to assess your Company’s FBT liability/status can give you
peace of mind and ensure that you have taken “reasonable” steps to comply with
the FBT legislation.
If you do not have all the information as requested in the Information Sheet for
using the Operating Costs method to calculate the car fringe benefit, we would
recommend that you should opt for the Statutory Formula method. Using the
Statutory Formula method may work out to have a higher FBT liability but it will
save you an enormous amount of time working out car expenses, whether they
are GST-inclusive or GST-exclusive, especially if you are selected for an audit
by the ATO. It is particularly effective when your car has a low business use and
high annual mileage. Please note that more than 80% of the FBT taxpayers
used this method in calculating the car fringe benefit.
OTHER FRINGE BENEFITS
There are other Fringe Benefits which may have been provided by your business
to employees. Please remember that, in the context of FBT, employees also
include directors and associates of directors. We have attached a list of “Other
Fringe Benefits Summary Checklist”. If you say “Yes” to any of the item listed,
please complete the Checklist form and return it to your client manager with the
other two forms by fax/mail on or before 21 April 20xx. It will be assumed that
none of the fringe benefits listed was paid to your employees in 20xx FBT year if
the form is not returned to us by 21 April 20xx.
We understand that FBT is very complex and the calculations are tedious.
However, we are here to help you. If you have any problem in completing the
attached sheets, do not hesitate to call us and we will be more than happy to
assist you.
Yours faithfully,
Chan & Naylor (Office)
CONFIRMATION FORM
To:
Chan & Naylor Parramatta
PO Box 4
Oatlands NSW 2117
I confirm that I do/ (do not)* have any FBT liability and require/(do not require)*
(Name of Accounting Firm) to assess our Fringe Benefit Tax liability/status for
the year ending 31st March 2011.
I am aware of the pricing structure for preparing and lodging 2011 FBT return.
Name of Employer: (please print) _________________________
Signature:
_________________________
Name (please print)
_________________________
Capacity
Director/Trustee/Partner*
Date
_________________________
* - delete where inapplicable.
Car Expense Summary
(One sheet for each car)
2011 FBT YEAR
Name of Employer:
___________________________________________________
Name of
Employee:____________________________________________________
Make/Model of Car: _____________________Car Registration No:
_____________
Name of the car’s registered owner:
_______________________________________
Base Value of Car: ___________________________ (GST-inclusive amount, if
any)
Date of Acquiring the Car:
_______________________________________________
Opening Odometer reading as at 1 April 2010: __________ (Km)-Must
Complete
Closing Odometer reading as at 31 March 2011: _________ (Km)-Must
Complete
No. of days the car not available for private use: _________________________
(days)
Car Expenses supported by receipts/invoices - All amounts should be GSTinclusive where GST applicable (The data below are not required if you opt for
using the statutory method to calculate the taxable value of the car benefit.)
Business Use: _______ (%) – supported by logbook for 12 consecutive weeks
Car
owned*
Leased/Hire-purchase (HP)/fully
If leased, total amount of lease paid per year
________________________________
If hire purchase, term of HP __________ (months); Monthly
amount:_____________
Note – if acquired in 2011 FBT year, please enclose a copy of HP/ Lease
agreement and copy of Motor Vehicle Purchase Invoice.
Note - if sold in 2011 FBT year, please enclose details of HP/Lease payout
and copy of Motor Vehicle Sale Invoice
Registration & Insurance
_______________
Repairs and servicing
_______________
Fuel & Oil (actual/estimated)
_______________
Other expenses (please specify)
Expenses paid by employees and not reimbursed
_______________
(with details of such payments and GST paid)
_______________
OTHER FRINGE BENFITS SUMMARY CHECKLIST
The following list summarises other fringe benefits which your business may
have provided to employees during the year. If you think you have provided any
of the following benefits, please tick the appropriate box and fax the form to the
attention of your Client Manager. Your Client Manager will then send you the
appropriate form for completion. If you are unsure whether or not such a fringe
benefit is provided, please discuss with your client manager.
From:
Fax No.:
(Please print the name of the employer)
TYPES OF FRINGE BENEFITS
Yes
Meal Entertainment fringe benefits - If you have paid for food,
No
drink, recreation, or accommodation expense on behalf of an employee
or associate, please contact your client manager who will advise how
that expense is to be treated and whether or not the expense is subject
to FBT.
Expense Payment Fringe Benefit – any expense paid on behalf
the employees or their associates.
Loan & Debt Waiver Fringe Benefit – Loan provided to an
employee without charging a commercial rate of interest or where an
employer waives an employee from the obligation to repay an
outstanding debt.
Car parking Fringe Benefit – parking provided for an employee
where there is a commercial parking station within one kilometre radius
of the employer’s car parking facility.
Property Fringe Benefit – employee provided with goods and
services at a discount from the employer or another firm under an
arrangement with the employer.
Housing Benefit – arises when an employer gives an employee,
including family members, the right to occupy or use a unit of
accommodation as the usual place of residence
Board Fringe Benefit - arises when an employer provides an
employee with accommodation and meals.
Airlines transport Fringe Benefit – free or discounted air travel
is provided to employees or their associates of an airline or a travel
agent
Living-away-from-home Allowance Fringe Benefit – where
an employee is paid an allowance to cover additional expenses while
the employee is living away from their usual place of residence for
employment reasons
Residual Fringe Benefit – any other benefit not specifically
covered above that are provided in respect of an employee’s
employment
NOTE
Road Toll & E Tag Expenses – not a car fringe benefit; purpose of the journey,
business or private, determines the deductibility of such expenses.
Attention:
(Fax No. 02 9684 1985)
(Please print the name of your Client Manager)