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Welcome to the March newsletter.
Are you Liable for Fringe Benefits Tax?
Following is a checklist to help answer this question. If you answer yes to any of the following you may be liable for Fringe Benefits Tax.
• Do you make cars or other vehicles owned by the business available to employees for private use including a car garaged at the employee’s home?
• Do you provide loans at reduced interest rates to employees?
• Have you released an employee from an owed debt?
• Have you paid for, or reimbursed, an expense incurred by an employee?
• Do you provide a house or unit of accommodation to your employee?
• Do you provide employees with living-away-from-home allowances?
• Do you provide entertainment by the way of food, drink or recreation to your employees?
• Are you a tax-exempt organisation that has provided food, drink or accommodation to employees?
• Have you provided property, either free or at a discount, to employees?
• Do any of your employees have a salary package arrangement in place?
• Have you provided your employees with goods at a lower price than they are normally sold to the public?
You will receive from us in March an FBT questionnaire to provide us with the necessary information to look after any Fringe Benefit issues you may have. A review of the above checklist will help you highlight any particular areas you may need to pay close attention to when receiving the questionnaire.
We have noticed an increase in ATO audit activity in the area of FBT and in particular car fringe benefits. For example the ATO are currently conducting a luxury car project whereby they are writing to certain taxpayers requesting information on cars registered to the business.
We recommend you take the appropriate time to ensure your answers in our questionnaire are up to date and accurate. In particular please note the requirements for a current log book.
If any of the questions posed above require further clarification or concern you in any way please make contact to discuss further.
Travel and Meal Allowance
Many clients of Macquarie Partners have staff who travel for work purposes. Costs associated with such travel are normally deductible to either the employer or employee depending on who has incurred the expense.
Generally if the expense has been incurred, paid by the employer or employee and can be substantiated by written evidence then this would form the basis of the claim made.
However at times an allowance is paid by an employer to an employee to cover expenses whilst travelling. Alternatively no allowance is paid and the employee wishes to make a claim in their return for expenses they have incurred. In these instances an understanding of the travel and meal allowances is beneficial. TD 2007/21 sets out the ATO guidelines for the 2007-2008 reasonable travel and meal allowance expense amounts.
Click here to access the determination in full.
We recommend to better understand the key points on travel and meal allowance you read paragraph 2 of this determination under the heading Taxation Ruling TR 2004/6. This covers among other things what expenses are covered, the substantiation required and the appropriate tax return treatment.
Please call your usual contact if you wish to discuss your particular circumstances with regards to travel or meal allowances.
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ATO Key Dates
Saturday 15 March
• Assessment of superannuation contributions surcharge and termination payments surcharge issued on 15 February 2008 – due date for payment.
• Amended superannuation member contributions statement (MCS) for inclusion in the May 2008 processing of surcharge assessments – due date for lodgment.
Friday 21 March
• February 2008 monthly activity statement – due date for lodgment and payment.
Saturday 22 March
• Superannuation assessment variation advice (AVA) for variation surcharge assessment issued on 15 February 2008 – due date for lodgment where applicable.
Monday 31 March
• Income tax return for head company of a consolidated group that does not have a member who has been deemed a large/medium business in the latest year lodged, but does have a member who has a total income in excess of $2 million in latest year lodged (unless due earlier) – due date for lodgment
- Payment (where required) for companies in this category also due by this date.
• Income tax return for companies and superannuation funds with total income in excess of $2 million in latest year lodged (excluding large/medium business taxpayers) – due date for lodgment
- Payment (where required) for companies and superannuation funds in this category also due by this date.
• Income tax return for individuals and trusts which were tax level 6 as per latest year lodged (excluding large/medium business trusts) – due date for lodgment
- Payment (where required) for individuals and trusts in this category is due as per notice of assessment.
• Superannuation MCS by most SMSFs – due date for lodgment. An SMSF may lodge its MCS when its fund income tax and regulatory return is due if this is later than 31 March 2008.
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