The ATO has identified significant compliance issues for SMEs and estimates that they’re paying far less in FBT than ATO modelling suggests they should be.
The ATO has identified the following as high-risk areas for FBT:
- Business travel - there’s been a surge in business travel post COVID restrictions
- Record keeping - one third of documentation is said to have errors
- Motor vehicles - audits have uncovered major problems with logbooks and high levels of non-compliance
- Living away from home allowances
- Employee contributions
- Issues with Reportable Fringe Benefit Amounts (RFBA).
How the ATO Uses Data Matching
It’s the digital age and the ATO has access to more data than ever, making their audit process far more precise and successful. The ATO continues to use data and analytics to identify high-risk employers. The data comes from the following sources to target employers not meeting their FBT liabilities:
Income tax Return (ITR) and Business Activity Statement (BAS)
Various items and labels contained on ITRs and BASs exist for the purpose of reporting data relating to employee remuneration and other transactions that may indicate an FBT liability.
Single Touch Payroll (STP)
STP makes it compulsory for all employers to report their payroll information electronically to the ATO.
Talk to a Tax Expert to Steer Clear of ATO FBT Audits
According to the ATO’s latest statistics, there was a difference of approximately $990 million between the actual FBT paid and the total theoretical FBT payable in 2019-20, amounting to a 20% FBT shortfall. Even the most diligent and honest employers can still be subjected to an audit. So to ensure compliance, it’s crucial that employers structure their benefits correctly and report accurately.
BlueRock has invested in specialised software and training to assist our clients to accurately assess their liability and ensure compliance. We can also facilitate precise reporting through to individual employee PAYG summaries. For further support in Fringe Benefits Tax, get in touch with our accounting team today for a free consultation .
