If your client is an employer, they will appreciate being advised what the ATO is looking out for, and the fringe benefits they’re expected to report, so they can avoid attracting its attention or making costly mistakes. In this year’s updated ATO list for taxpayers, titled “What attracts our attention”, there are six items that specifically relate to fringe benefits tax (FBT).

These items are:

  • failing to report motor vehicle fringe benefits, incorrectly applying exemptions for vehicles, or incorrectly claiming reductions for these benefits
  • mismatches between the amount reported as an employee contribution on an FBT return compared to the income amounts on an employer’s tax return
  • claiming entertainment expenses as a deduction but not correctly reporting them as a fringe benefit, or incorrectly classifying entertainment expenses as sponsorship or advertising*
  • incorrectly calculating car parking fringe benefits** due to:
    • significantly discounting market valuations
    • using non-commercial parking rates
    • not being supported by adequate evidence