FBT Returns with Nil Balance – Lodge on Time

June 2016

Failing to lodge FBT returns can have some unexpected consequences for small business.

Many small businesses with nil Fringe Benefits liability, i.e. whose employees make contributions so the total FBT liability becomes zero, do not lodge FBT returns, in part because they don't think it's necessary or want to avoid the time and cost of preparing and lodging a nil balance FBT return. There are, however, some benefits if the FBT return is lodged.

Lodging an FBT return – even one with a nil FBT liability – means that should they decide to review it, the ATO must generally issue an amendment assessment within three years of the original return. If the ATO believes that you haven't made a full and true disclosure of all material facts and that there is evidence of tax avoidance, then the review period is extended up to six years. However, if your business has not or does not lodge an FBT return, then there is no limit on how far back the ATO can review.

Therefore, even if you have no FBT liability, it is still worthwhile lodging a nil FBT return. Should your business come under the scrutiny of a tax audit, which is very time consuming and expensive, lodging an FBT return provides a closure point.

If you have no FBT liability, the due date for lodgement is 25 June, so it is still not too late for you to submit your FBT return. 

Unfortunately, lodging a 'notice of non-lodgement' with the ATO is not regarded as an assessment for the purpose of the amendment rules so the three years' limit doesn't apply. 

For more information about FBT lodgements and consequences of not lodging, please contact us on 02 9957 4033. 

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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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