2023 FBT Tax Time

by Taylor Dicken

We’re coming up to the end of the 2023 Fringe Benefits Tax (FBT) year which runs from 1 April 2022 to 31 March 2023.

If you are getting assistance from Harris Black (your tax agent) with your 2023 FBT return, the due date for lodgement is 26 June 2023.

What is FBT?

FBT is a tax on non-cash benefits provided to employees or their associates. This also includes non-salary directors/trustees. The tax is paid by the employer and is separate from income tax. Below are some common examples of non-cash benefits provided to employees where FBT may apply:

  • Allowing a vehicle owned by the employer to be used by an employee for private purposes.
  • Payment of expenses on behalf of an employee.
  • Providing entertainment to employees such as Christmas parties, meals, drinks, or recreational activities.
  • Providing loans to employees or forgiving debts owed by the employee to the employer.
  • Payments to an employee to compensate for living expenses incurred due to having to live away from their normal place of residence for work purposes.

What to do next

In preparation for the 2023 FBT year ended 31 March 2023, please be sure to:

  • Consider if you have provided non-cash benefits to employees that may be relevant for FBT.
  • Consider keeping a logbook for a period of 12 weeks detailing the business/private use of any vehicles used by employees. This allows for calculation of the FBT using the operating cost method which can often yield a more favourable result.
  • Make note of the closing odometer reading at 31 March 2023 for any vehicles used by employees.
  • Provide explanations for transactions in your online accounting software for any transactions coded to ‘Entertainment expenses’ or ‘Staff amenities’ to allow your Harris Black team member to differentiate between FBT-applicable and FBT-exempt transactions.

Harris Black will be sending a FBT checklist to clients in the coming weeks to assist with identifying FBT reportable benefits. If you do not receive a checklist but believe you may have provided applicable non-cash benefits, please let your Harris Black team member know.

If you have any questions, or would like to discuss your specific situation, please do not hesitate to contact us.

Harris Black Business Leaders Forum – March 2023

2023 Leadership And Business High Performance Trends: Discover What Will Be Critical To Your Success In The Year Ahead

In our recent Harris Black Business Leader Forum, we looked at ‘2023 leadership and business high performance trends: Discover what will be critical to your success in the year ahead’.   

We covered off the major themes of: What critical business and leadership trends do you need to embrace for higher performance in 2023? What strategies will you implement to successfully navigate continued market turbulence?   

In addition to those themes we did a deeper dive into the following areas: what’s working and what’s not for leaders around key areas of growth/profit, attraction/retention, staying agile, managing a hybrid workforce, implementing strategy, resilience, and personal productivity.  

Overall, it was a terrific workshop with the attending business leaders and also provided opportunities to problem solve key challenges and opportunities for 2023 with experienced peers. 

If you are interested in joining our practical and high-value learning sessions, we would like top invite you to join us at our next Business Leaders forum coming in May 2023.  Please refer to our Harris Black Team Member for details.   

ATO Interest Rates Hit A 10 Year High

Whilst the RBA and banks have been making headlines with 10 interest rate rises in a row the ATO have quietly been increasing their General Interest & Shortfall Charges.

From 1 April the ATO have increased rates on outstanding debts to:

  • General Interest Charge (GIC) 10.46% – applied to late or unpaid tax liabilities including Income Tax, excess shortfalls in Income Tax Instalments varied or estimated incorrectly, GST & PAYG.
  • Shortfall Interest Charge (SIC)  6.46% – late lodgement interest incurred from the due date for a return to actual date lodged, and then GIC applies.

Both the SIC and GIC rates are determined by a formula in the Taxation Administration Act 1953 which relies on the 90-day bank bill rate rather than the high-profile RBA cash rate. To calculate the GIC rate, 7 percentage points are added to the average bank bill base rate for a month, which is specified by the act, in the preceding quarter, whilst 3 per cent is added for SIC.

Our experience over the last few months is that GIC which was being remitted by the ATO has now stopped and interest is being automatically added to any outstanding balance.

Whilst the ATO are still happy to enter repayment plans for amounts outstanding, they are generally not inclined to remit interest.

Hence applications for remittance now involve a more formal review of your current financial circumstances.

Throughout COVID the ATO paused its firmer and stronger actions regarding unpaid tax bills but this is no longer the case.

Do not hesitate to contact your Harris Black team member should you require any assistance or further clarification.

Brentnalls Conference – Gold Coast

We hosted the largest ever Brentnalls Network conference from 8th to 10th March at Sheraton Mirage at the Gold Coast with 48 attendees and many spouses joining us for dinners. There was strong representation of directors, principals and managers from all network firms, and the discussions were often quite animated and noisy as people shared (good and bad) ideas on what their firms had been implementing and dealing with as we exit the Covid operating environment.

The afternoon of Day 1 saw 4 sub-groups meet to discuss Tax, Business Advisory, Women in Business and the Leadership NextGen Hub. Many of the attendees were attending their first Brentnalls Network conference, and this allowed them to instantly connect with other attendees at a similar stage of their career.

We forget that our surf clubs are quite unique to Qld and the attendees from the other Australian states plus Auckland loved the casual dinner (and trivia) on the first night at the Southport Surf Club.

Day 2 saw a large contingent go for an early beach walk, before network firms shared their practice updates including insights into HR, IT, new services and wins and losses in all areas of their practice. We also had a 2-hour presentation from a long-standing client who recounted his experiences over a 35 year period. He spoke without notes and finished exactly on time, and it was obvious the passion and dedication to his businesses and people that surround him. We went way overtime with question time.

We had a beautiful dinner at Glass restaurant over the road at Marina Mirage, and it was certainly a late night for some.

On Day 3, in recognition of International Women’s Day we had a guest speaker Petris Lapis talk about Unconscious Bias in the workplace and the broader community. It was very well done and highlighted the need for people to be more aware of their words and actions in everyday life.

Our final night saw everyone dressed up for a Hawaiian themed cocktail party. The noise was deafening as everyone enjoyed winding down and discussing both the great location and things they had learnt from other firms. There has already been a flurry of emails between network firms sharing templates, ideas and better ways of operating.

The conference was a huge success, and the Network bade farewell to Matthew Holden from Brentnalls SA as Chair after a 2 year period and welcomed Andrew Heazlewood (Cogger Gurry in Hamilton Victoria) as the new Chair, and our own Renee Bettenay as Deputy Chair.

Meet The Staff – Lilian Smart

Harris Black welcomed Lilian Smart to our team last week. Lilian joined us as a receptionist, and she has been settling into the new role very nicely.

Lilian loves to cook spring rolls, steak (cooked rare) and caramel slice. She would love to live on the north coast of Italy and would choose to only eat salad for the rest of her life as anything can be a salad. Lilian cannot live without her lip balm and always likes to start the day with a cold shower to wake her up, as she is not a morning person.

Lilian loves the snow and would spend all her time there if possible. The most relaxing place she has ever been was a rainforest retreat. She refuses to watch anything to do with the star wars franchise. Her dream car is a Range Rover and after an incident with a treadmill when she was younger Lilian refuses to go near them now.

Important Tax Dates

31 March 2023
• Lodge tax return for companies and super funds with total income of more than $2 million in the latest year lodged (excluding large and medium taxpayers), unless the return was due earlier.
• Lodge tax return for the head company of a consolidated group (excluding large and medium), with a member who had a total income in excess of $2 million in their latest year lodged, unless the return was due earlier.
• Lodge tax return for individuals and trusts whose latest return resulted in a tax liability of $20,000 or more, excluding large and medium trusts.
21 April 2023
• Lodge and pay quarter 3, 2022–23 PAYG instalment activity statement for head companies of consolidated groups.
• Lodge and pay March 2023 monthly business activity statement.
28 April 2023
• Lodge and pay quarter 3, 2022–23 activity statement if electing to receive and lodge by paper and not an active STP reporter.
30 April 2023
• Lodge TFN report for closely held trusts if any beneficiary quoted their TFN to a trustee in quarter 3, 2022–23.

How can we help you?

Today’s financial environment demands a regular review of strategy and a focus on execution.