Log Book Alert: 31 March FBT deadline is looming!

Zoe Wainscott 27 March 2024

As 31 March looms, businesses across Australia are gearing up to tackle their fringe benefits tax (FBT) obligations. For many companies providing employees with motor vehicles, managing FBT can be particularly complex, especially when it comes to maintaining accurate logbooks.

 

Understanding Fringe Benefits Tax (FBT)

FBT is a tax imposed by the Australian government on certain benefits provided to employees in addition to their salary or wages. These benefits, known as fringe benefits, can include the provision of motor vehicles, housing, loans, entertainment, and more. The aim of FBT is to ensure that employees pay tax on the non-cash benefits they receive from their employer.

 

FBT and Motor Vehicles

One of the most common fringe benefits provided by employers is the use of motor vehicles for private purposes. If your business provides employees with company cars or other vehicles that are available for private use, you may be liable for FBT.

 

Reporting Requirements and Log Books

To accurately calculate FBT liability for motor vehicles, employers must keep detailed records of vehicle usage, including both business and private kilometres. This is where logbooks come into play. A logbook is a written record of all trips made in a vehicle over a specified period, for a minimum of 12 weeks. It should include details such as the date of each trip, the purpose (business or private), the starting and ending odometer readings, and the total kilometres travelled.

 

Tips for Getting Ready for FBT Time

  • Review Your Policies: Take some time to review your company’s policies regarding the use of motor vehicles for private purposes. Ensure that employees are aware of their responsibilities when it comes to recording their usage.
  • Educate Your Employees: Provide training or guidance to employees on the importance of maintaining accurate log books. Emphasize the need for detailed and timely record-keeping to avoid any discrepancies come tax time.
  • Regularly Audit Records: Schedule regular audits of log books to ensure compliance and accuracy. This proactive approach can help identify any discrepancies or issues early on, allowing you to address them before FBT reporting time.
  • Plan Ahead: If you discover that logbooks are not being maintained correctly, it is critical that you remedy this prior to the end of March so that you have the required 12 weeks of data.

Navigating FBT and reporting requirements for motor vehicles can be a daunting task for many businesses – with more to consider than we have touched on in this article.

In general, businesses should consider careful planning, education, and with the right tools in place, you can streamline the process and ensure compliance. It’s also advisable that you seek advice from an experienced tax professional.

If you have questions about how FBT applies to your business, or need help implementing the right systems, reach out for a free consultation today.

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