The Australian Tax Office (ATO) is actively using sophisticated data analytics to target employers who fail to report, or incorrectly report, fringe benefits.
ATO compliance teams are specifically looking for businesses that:
- Fail to lodge fringe benefits tax (FBT) returns despite providing vehicles for private use;
- Misunderstand exemptions, particularly the common misconception that dual-cab utes are automatically exempt from FBT;
- Neglect record-keeping, such as failing to maintain valid logbooks or odometer readings to support their claims;
- Incorrectly apportion usage, often treating private travel – including garaging a vehicle at an employee’s home – as business use.
To ensure compliance, the ATO emphasises that a vehicle is considered “available for private use” if it is garaged at or near an employee’s home, regardless of whether they have permission to use it.
Employers are expected to:
- Correctly identify the vehicle type (which impacts whether they are providing a car benefit or a residual benefit); and
- Maintain robust documentation, as invalid logbooks can lead the ATO to apply the “statutory formula method”, often resulting in higher tax liabilities.
Katrina Brennan, Principal, SRJ Walker Wayland Business Growth Advisors, Accountants and Auditors, Level 2/2 Innovation Parkway, Birtinya, 5301 9957, srjww.com.au
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