Why the ATO is paying closer attention

• FBT continues to be one of the more complex areas of tax, and the ATO regularly identifies errors where benefits are incorrectly treated as exempt or not reported at all.
• With improved data-matching technology, the ATO now has greater visibility over payroll records, vehicle usage and business expenses. This allows them to more easily identify differences between what businesses report, and the benefits employees receive.
  
  

Key areas the ATO is reviewing

• Motor vehicles and car expenses – missing or outdated logbooks, incorrect valuation methods, and private use not properly recorded
• Work-from-home equipment and electronic devices – such as laptops, phones and home office equipment where exemption rules may not apply
• Entertainment and staff benefits – including meals, gifts, staff functions and client entertainment that may be incorrectly treated as minor benefits
• Employee reimbursements and allowances – particularly where private expenses are reimbursed
• Salary packaging arrangements – ensuring benefits are valued and reported correctly
  
  

Common mistakes the ATO is seeing

• Not lodging a Fringe Benefits Tax (FBT) return when one is required (note the FBT year runs from 1 April to 31 March)
• Assuming benefits are work-related without sufficient evidence
• Missing documentation such as logbooks, declarations or invoices
• Incorrectly applying exemptions or concessions
• Failing to review FBT positions as business operations change
  
  

What this means for employers

• With audit activity increasing, the cost of getting FBT wrong can be significant, including additional tax liabilities, penalties and interest.
• The ATO has emphasised that businesses who review their positions early and correct issues proactively are in a much stronger position than those who wait until an audit occurs.
  
  

Steps businesses should consider

• Review all benefits provided to employees, including informal or one-off benefits
• Ensure logbooks, declarations and supporting documentation are current
• Confirm that exemptions genuinely apply
• Reassess vehicle usage where working arrangements have changed
• Seek advice before introducing new benefits or salary packaging arrangements
  
  

How Dare Accounting can help

FBT can be complex, but proactive planning can significantly reduce risk. Our team can assist with:

• Reviewing your FBT exposure
• Identifying benefits that may have been overlooked
• Preparing or reviewing FBT returns
• Assisting with ATO reviews or audits
• Implementing systems to help manage FBT obligations going forward

If you would like to review your FBT position, please contact the Dare Accounting team. Acting early can help avoid costly surprises later.