FBT
FBT year
The FBT year is the period from 1 April to 31 March, used to work out and report fringe benefits tax, and it differs from the income tax year that ends on 30 June.
The FBT year is the twelve-month period from 1 April in one calendar year to 31 March in the next. It is the period over which an employer works out the fringe benefits they have provided, calculates the fringe benefits tax payable and lodges the FBT return. It is not the same as the Australian financial year, which runs from 1 July to 30 June and is used for income tax and most other tax purposes. Many small businesses are caught out by this difference.
At the end of each FBT year, an employer who has provided fringe benefits needs to calculate the taxable value of each benefit for that year. For example, a car made available to an employee has its taxable value worked out for the number of days it was available between 1 April and 31 March. If a benefit started part-way through, the value is generally pro-rated for the days in the year. Employers can look back across the year to see all benefits and consider any employee contributions.
The FBT return and payment are due after the year ends. The lodgment and payment dates fall in May, though they can change and an employer who uses a registered tax agent may have a different date. Employers should check the dates on ato.gov.au each year. Employers who owe no FBT may not need to lodge a return, but should notify the ATO if they do not expect to lodge. Late lodgment or payment can lead to penalties and the general interest charge.
Some practical consequences flow from the year differing from the financial year. Employee contributions towards benefits, such as payments for private car use, need to be made within the FBT year or by a specific later time, to count in the calculation. Records like logbooks should align with the FBT year, and an odometer reading at 31 March is often needed. Employers also need to remember to include benefits in the income statement data, for the employee's reportable fringe benefits amount, which is reported based on the FBT year ended in the relevant income year.
GST interacts through timing. GST credits on purchases of benefits are claimed in the BAS for the period of the invoice, which has nothing to do with the FBT year, but the choice of whether to claim credits affects the gross-up rate used for the FBT calculation. Employers should therefore keep consistent records of which credits were claimed, so the correct rate is applied for the FBT year.
A common mistake is to assume FBT follows the 30 June year and to prepare calculations too late or using the wrong period. Another is to forget that benefits provided around 1 April may fall in one FBT year or the next, which affects thresholds and exemptions.
This is general information only, so confirm your FBT dates with the ATO or a registered tax professional.
Worked example
An employer provides a work car for private use from 1 January until the end of the year to an employee. For the FBT year 1 April to 31 March, the car was available for 90 days from 1 January to 31 March, so only those 90 days count for that year, with the remaining days falling in the next FBT year. The employer prepares a return for the year to 31 March and lodges it in May.
Practical tips
- Diarise 31 March as your FBT year end and begin collecting logbooks, odometer readings and declarations early.
- Make sure employee contributions are paid within the time allowed so that they reduce the taxable value for the correct year.
- Check the due dates for the FBT return and payment each year with the ATO.