Common Fringe Benefits Tax errors to avoid
As mentioned in a previous Top Tax Tips, we recently published a FBT Year End Planner detailing some timely FBT year-end reminders and strategies.
For the 2018 FBT year which ended on 31 March 2018, the ATO will be on special lookout for the following most common FBT errors:
- Failing to report an employee’s private use of a company car (unless the employee uses utes or panel vans for private purposes and other conditions are also met) or incorrectly filling in logbooks;
- Claiming exempt food and accommodation components in living-away-from-home allowance (LAFHA) benefits (a common error because the exempt accommodation and food component of the LAFHA should only reduce the taxable value of the LAFHA benefit and even if a LAFHA is fully exempt from FBT, the entire amount of the allowance and the corresponding reduction in the taxable value should still be recorded on the FBT return) or claiming a reduction in the taxable value of the LAFHA benefit for exempt accommodation and food components in invalid circumstances;
- Undervaluing employee car park benefits (for example where market valuations are significantly less than the fees charged for parking within a one kilometre radius of the premises in which the car is parked); or
- Incorrectly claiming employer exemptions and rebates (for example if there are incorrect calculations of benefit values or reduction amounts or no declaration to substantiate the exemption being claimed).
Please speak to Sarah McEachern or your Nexia Edwards Marshall NT adviser so that we can assist you to complete your FBT return correctly.
New GST withholding regime on sale of new residential premises from 1 July 2018
Currently, purchasers of new residential premises pay a GST inclusive amount to the seller (i.e. GST is included in the purchase price so the purchaser pays GST to the seller and the seller must remit the GST to the ATO).
However, under a recently enacted new law, purchasers of new residential premises will have to pay the GST component of the purchase price directly to the ATO:
- For sale contracts signed on or after 1 July 2018, the purchaser will be required to withhold and pay 10% of GST to the ATO on the day the consideration is provided (i.e. at instalment dates or only at settlement if lumpsum at settlement); and
- For sale contracts signed before 1 July 2018, the 10% GST withholding rule will only apply to payments made on or after 1 July 2020 (i.e. there is a 2-year transitional period where GST withholding will not apply to consideration provided in this transitional period)
This new GST withholding regime does not apply to the sale of used (i.e. not new) residential properties or the sale of new or used (i.e. not new) commercial premises.
How can Nexia Edwards Marshall NT help you?
For any questions or to discuss any of the above in relation to your personal situation, please contact Sarah McEachern or your Nexia Edwards Marshall NT Adviser.