Do you have a motor vehicle? Do you use a phone in connection with your business?
If so, there are some important documents you must compile by 31 March 2012 to minimise your fringe benefits tax liability.
Although most business owners do not lodge fringe benefits tax returns, you are still required to maintain certain records to ensure that fringe benefits tax does not impact upon your business.
With the fringe benefits tax year coming to a close on 31 March 2012, review the following items to ensure you have dealt with important tasks:
1. Odometer readings
If your business owns or uses a car, take an odometer reading as near as possible to 31 March 2012. You will be asked for this during the preparation of your 2012 income tax returns.
2. Otherwise deductible declarations
Do you or any of your employees pay for the following expenses through your business?
- Mobile telephones
- Home internet connections
- Professional subscriptions
These expenses are technically fringe benefits. The reason we don’t usually pay fringe benefits tax on these is because they may be otherwise deductible to the employee. However, in order for this to be the case, you are required to get a declaration from each employee confirming that the expense is otherwise deductible to them.
We recommend asking employees with any of the above expenses to sign an ‘otherwise deductible declaration’ at the end of each FBT year. Pro-forma forms conforming to the ATO’s requirements are available from OBT which you can use for this purpose.
3. Living Away From Home Allowance
If you’re paying yourself or any other employees a Living Away From Home Allowance (LAFHA) through your business, the ATO requires that you obtain a declaration from your employees in every FBT year. Organise for your employees who receive a LAFHA to sign a form and keep with your records. These are also available from OBT.
With the FBT year-end imminent on 31 March, please contact OBT if you would like to talk about any aspect of FBT that affects your business.