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Employer Offered Vaccine Incentives & Pets To Trigger FBT Obligations

Did you offered your employees with pets, tickets and vaccine incentives during the pandemic period? If yes, ATO has urged all eligible employers who have provided their employees with the above listed benefits to consider their Fringe Benefits Tax (FBT) obligations. This move will draw a significant number of employers into the FBT net for the first time.

The obligations to lodge include registering, reporting, lodging and paying FBT. A fringe benefit is a form of payment done to an employee, other than salary or wages. Some common examples include providing an employee with a work car for private usage, paying an employee’s gym membership or providing tickets to concerts or events for entertainment purposes.

Michelle Allen, Assistant Commissioner, ATO said, “Because of the coronavirus outbreak, we have seen more employers providing their employees with fringe benefits, such as paying for work-related items that allow their employees to work from home and providing non-cash benefits as incentives or rewards for employees getting COVID-19 vaccination”.

ATO even confirmed that it has heard of an employer who provided its employees with pets to accompany them while they work at home, maybe as a move to keep the stress out.

Though it’s good to witness that employers care about their employees and keep their best interests in mind, it is important for them to do the right thing and comply with their tax obligations, including FBT.

To identify FBT non-compliance and impose penalties for incorrect or late FBT returns, ATO uses a range of its own and third-party data sources.

An FBT year runs from 1 April to 31 March, and FBT returns are due by 23 May 2022. Employers having an FBT liability for the first time can register before lodging. Those lodging through a registered tax accountant in Dandenong can lodge until 27 June 2022.

Also, employers who are already registered for FBT but don’t have any FBT return to lodge for the year are required to advise the ATO via a notice of non-lodgment form.

For more details about the FBT return lodgement process, feel free to contact our tax agents at KPG Taxation. We’ll be more than happy to assist you.