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Why the ATO is looking closely at you this FBT time

March 2014

Almost half of all tax collected in Australia flows through about 800,000 employers. In an environment where tax revenues are falling, Fringe Benefits Tax (FBT) is of particular interest to regulators. The simple reason is that the ATO can rely on the fact that many employers simply fail to recognise their FBT obligations - it is low hanging fruit after all.

To save you from the virtual equivalent of a knock on the door from the ATO, we've included our list of the key things to watch out for pre and post the end of the FBT year on 31 March.

iPad vs Laptop ... what's the difference?
The answer is ... not a lot any more.  A few years ago the ATO considered that an iPad and a laptop were two different items with different functions.  But now the ATO is being forced to keep pace with evolving technology and has revisited the issue. 

Why is this important?
The distinction is important because under FBT law, an employee can for example, salary sacrifice one portable electronic device each year FBT free as long as that device is also used in their job.  

So, that means that as long as you use the device for your work (for example working from home), you can pay a lot less for that device than if you just walked into the shop and bought it.  But wait there's more.  

You can also salary sacrifice more than one electronic device each year as long as those devices have different functions.  So, you could salary sacrifice a laptop and an iPad in the same year FBT free if the laptop and iPad had different functions.  

One FBT free device per year
With technology melding the functionality of electronic devices, the ATO have now said that employers need to look at the function of the device to make sure there is only one FBT free device with that function each year.  If the function is effectively the same, then only one device can be FBT free.

Something to watch out for. For more information about Fringe Benefits Tax and reporting, please contact us on 02 9957 4033 or via our contact form


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Last updated March 2014. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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Disclaimer

This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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