FBT – Good intentions always have unintended consequences.

To know where you are going you first must know where you have been.

As a very green Accountant FBT was explained to me as follows

“It’s a tax that was brought in to disincentivise Directors and large businesses owners from claiming their long boozy lunches and Spouses cars in the business. Why should business owners be able to claim these things when employees can’t”

My employer at the time may have even suggested it was as a result of Alan Bonds’ extravagance in the 80s that was to blame for the FBT legislation.

It’s a good story that gets people on side with FBT… unless you have a business.

A few very simple tips for reducing your FBT liabilities are as follows

1.       Keep a motor vehicle logbook!

The ATO receives motor vehicle registration information from Department of Transport. If you have a motor vehicle in a Trust or Company please keep a logbook and details of your vehicle running costs.

If you are unsure if you need a logbook please send us an email or give us a call.

2.       Separate out Entertainment expenses into Employees and Clients.

Separate accounts in your bookkeeping package are generally a good idea. 

3.       Lodge an FBT return even if there is no FBT to pay.

This may sound odd, however the ATO is limited to a 2-year amendment period. So, if you are audited the ATO can only go back 2 years. The exemption to this rule is if they find evidence of fraud.

The FBT year runs 01 April to 31 March.

We will be in touch with affected clients in April.

Alicia Delves 08.01.2025