When reporting fringe benefits on
income tax returns, remember:

■■ to include employee
contributions at the ‘Fringe
benefit employee contributions’
label in the income section of the
employer’s income tax return
■■ some employers incorrectly
reduce company income tax
deductions for the private use
of cars instead of accounting
for FBT or applying employee
contributions to eliminate the
FBT liability
■■ to make sure an accurate
FBT return has been prepared
and lodged where necessary.
For example, if you prepare a
capital allowances (depreciation)
schedule and the business
owns a motor vehicle, check if
the vehicle is subject to FBT by
asking questions like:
−−Have employees taken vehicles
home, even for security
reasons? If so, the vehicle may
have been used for private
purposes and a benefit may
have been provided.
−−Does an employee director
have the private use of a
business owned or leased
vehicle? Has a taxable fringe
benefit been recorded?
−−Are other expenses being
claimed that could be subject
to FBT? Examples include
reimbursing an employee for
their mortgage repayments or
paying their health insurance
premiums.
−− If paying an employee’s
contribution has been made
by journal entries, has it been
included in the employer’s
assessable income and has
any associated GST been
correctly accounted for?
−−Where employee contributions
have been included in the
employer’s assessable
income, has the benefit been
correctly worked out?
−−Has the GST-inclusive amount
of the employee contribution
been used to work out the
taxable value?