fbt update 2013 - fbt survival€¦ · fbt update 2013 . understanding fbt fbt update & salary...
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FBT Update 2013
• FBT Seminars: www.fbtseminars.com.au • Car Parking FBT Rates: www.carparkingFBTrates.com.au • FBT Return review options: www.fbtreturn.com.au
A Time of Change & ATO Focus. Salary Packaging - Paul Mather
FBT Update 2013
Understanding FBT
FBT Update & Salary Packaging
Liability limited by a scheme approved under Professional Standards Legislation
1. Has FBT ever had a greater profile? a) Public figures in benefit scandals b) LAFHA changes c) Removal of concession for in-house benefits d) Change in valuation of airline benefits e) Cars in transition f) ATO & OSR audits increase g) Non profit tax / FBT reform?
2. Salary Packaging
a) Introducing Salary Guru b) Understanding the full extent of salary packaging
Understanding FBT
LAFH changes
Liability limited by a scheme approved under Professional Standards Legislation
Commenced 1 October 2012: 1.Required to maintain a home in Australia whilst living away from it – home must always be available (ie can’t sublet) 2.12 month cap on duration at any one location The above restrictions do not apply to FIFO/DIDO employees and those employees who qualify for the transition Transitional arrangements from 1 October 2012: 1.Must have LAFH arrangement in place on 8 May 2012 2.Permanent residents, LAFH extended to 30 June 2014 (no 12 month cap or requirement to maintain a home) 3.Temporary residents, LAFH extended to 30 June 2014 but must maintain a home in Australia
Understanding FBT
LAFH changes
Liability limited by a scheme approved under Professional Standards Legislation
From 1 October 2012 increased substantiation: 1.Accommodation – rental agreement + receipts / evidence of payment 2.Food – if amount is greater than ATO reasonable limits, then must substantiate in full or excess subject to FBT (statutory food amounts also subject to FBT) 3.4 different declarations Substantiation applies to all LAFH situations including: 1.LAFH who qualify for transition 2.FIFO / DIDO
Understanding FBT
LAFH transition
Liability limited by a scheme approved under Professional Standards Legislation
Taking stock of “mobile” employees 1. Transition – permanent residents with LAFH arrangements in place prior to May 2012 2.Cashing out – can we cash out a LAFHA? 3. The substance of the arrangement is travel 4. FIFO / DIDO concession 5. Permanent relocations
Understanding FBT
Preparing the 2013 FBT Return - LAFHA
Liability limited by a scheme approved under Professional Standards Legislation
1. Determine true LAFHA’s v FIFO / DIDO v Travel v Permanent Relocation
2. LAFHA’s & FIFO / DIDO a) Substantiate accommodation b) Substantiate food in full where the weekly amount is
above the ATO reasonable amounts or pay FBT on excess and statutory food amounts?
c) Substantiation includes rental agreements, invoices / receipts, proof of payment
d) Employee declaration may suffice e) Employer or employee to retain substantiation for 5
years? 3. Manipulating the payroll data 4. Family groupings
Understanding FBT
2013 FBT Return – LAFH declarations?
Liability limited by a scheme approved under Professional Standards Legislation
ATO Declaration
Declaration applicable to
Employees who qualified for the
transition
FIFO / DIDO employees
Employees required to maintain a home
Employees who only received LAFHA prior
to 1 October 2012
Standard LAFH Declaration YES YES (but only if
LAFHA received prior to 1 October)
YES (but only if LAFHA received
prior to 1 October)
YES
Fly-in fly-out or Drive-in drive-out Declaration
NO YES NO NO
Employee related expenses Declaration
YES YES YES NO
Maintain a home in Australia Declaration
NO NO YES NO
Additional information Declaration (not ATO)
YES YES YES YES
Maximum number of declarations required
3 4 4 2
Understanding FBT
LAFH strategies
Liability limited by a scheme approved under Professional Standards Legislation
In place of LAFHA 1.Education fees + uniforms + books 2.Home Leave – 50% concession 3.Business travel? Continuing LAFHA: 1.Provide directly or reimbursement basis 2.Exclude Statutory food amounts Permanent relocation:
a) Temporary accommodation b) Incidental costs of sale & purchase
Temporary relocation – does the exemption for “relocation transport” includes temporary accommodation???
Understanding FBT
Food from 1 April 2013
Liability limited by a scheme approved under Professional Standards Legislation
ATO release Tax Determination 27 February 1.Domestic food rate structure similar to prior years 2.Reasonable amount reduced to $233 per week for a single adult 3.$117 each additional adult and $59 each child Continuing LAFHA: 1.Up to 31 March 2013, single adult rate is $250 per week 2.Opportunity to grandfather that rate after 31 March 2013 if contract refers to annual ATO rates. Subject to no material change in contract
www.carparkingFBTrates.com.au
Car Parking & FBT
FBT Update 2013
Understanding FBT
FBT & Car Parking – we can help you?
Liability limited by a scheme approved under Professional Standards Legislation
Do you have a liability to FBT on car parking? 1.Do you provide parking to your employees?
a) Owned Parking – on premises b) Owned Parking – off premises c) Leased Parking – on premises (in employers name*) d) Leased Parking – off premises (in employers name*) e) Otherwise available
2.Is there a commercial parking station within a 1km radius that charges above the daily threshold of $7.83 on 1 April 2012? * If not in employers name, then expense payment benefit
Understanding FBT
FBT & Car Parking – we can help you?
Liability limited by a scheme approved under Professional Standards Legislation
Do you have a liability to FBT on car parking? 3.If YES to 2 above, obtain the lowest daily rate within a 1km radius at 1 April 2012*; and 4.Obtain the lowest daily rate within a 1km radius at 31 March 2013*; and 5.Confirm the no. of spaces and beginning & end date; and 6. Confirm the number of days a benefit was provided or apply the 228 day statutory method * All day rate for a Commercial parking station
Understanding FBT
FBT & Car Parking – What you get
Liability limited by a scheme approved under Professional Standards Legislation
Access to Australia’s largest database of car parking rates 1.Report signed off by a Registered Tax Agent 2.Easy to use format for FBT return preparation 3.Quick turn around 4.Competitive pricing – we will beat any written quote by 15% Saves you time and all the hassle Saves you money and reduces your tax risk If you think you’ve paid too much FBT in the past – let us organise a FBT refund for you
Understanding FBT
FBT Returns – common oversights
Liability limited by a scheme approved under Professional Standards Legislation
Frequently overlooked benefits 1.PR costs – application + consulting fee 2.Spouse / family travel 3.Meals provided to non travelling employees 4.Meals provided to non travelling clients 5.Meals provided to non travelling spouses (incl. clients) 6.Health insurance 7.Taxi from “non place of work” to home 8.Visa renewals 9.LAFHA Food – statutory amounts 10.NEW FOR 2013 – Temporary Accommodation GST & Income Tax issues with 3, 4, 5 & 7
Understanding FBT
ATO get serious
Liability limited by a scheme approved under Professional Standards Legislation
Audit activity 1.5,000 PAYG audits 2.400 audits – 34% outside FBT system 3.10,000 education letters – 3% registering for first time 4.Encourage voluntary disclosure 5.Tax agent focus The future: 1.Cars 62% of revenue – increased data matching 2.FBT education with registration / glove box 3.A new form of FBT audit: Short & Sharp 4.Apply penalties more firmly 5.Falsified logbooks 6.LAFHA audits 12 months away
Salary Packaging
The total cost of taxable benefits
What is the total cost of a $1,100 taxable fringe benefit? ►FBT – $1,056 ►Payroll Tax – $113 ►Workers Compensation – $103 ►Benefit acquisition (less GST) - $1,000 Total cost = $2,272 = no good for salary packaging!
Understanding FBT
Introducing PACKAGING by SALARY GURU
Liability limited by a scheme approved under Professional Standards Legislation
We are different!
A.No monthly fees for anyone
B.Free written policy documents
C.Free education & training
D.Efficient technology based solution
How we deliver the best solution
A.We offer all fringe benefits to the full extent of the FBT law
B.Owned & operated by FBT qualified tax experts
C.No client too big or too small
Powered by FBT Solutions – FBT & Salary Packaging is what we do!
Understanding FBT
Cars
Liability limited by a scheme approved under Professional Standards Legislation
1.Cars – Novated leases
I. using statutory formula method II. operating cost (Log Book) method III. pre tax or post tax basis
2.Cars – Utility vehicles and tool of trade 3.Cars – Associate leasing
Powered by FBT Solutions – FBT & Salary Packaging is what we do!
Understanding FBT
Car Parking
Liability limited by a scheme approved under Professional Standards Legislation
1.Car Parking – Leasing 2.Car Parking – Owned 3.Car Parking – Adhoc 4.Car Parking – Prepaid 5.Car Parking – Pre-tax & Post-tax basis 6.Car Parking – Fly in/Fly out
Powered by FBT Solutions – FBT & Salary Packaging is what we do!
Understanding FBT
LAFHA, Relocation & Travel
Liability limited by a scheme approved under Professional Standards Legislation
1.Airline Lounge Memberships 2.Remote Area Benefits 3.LAFHA – Accommodation and Food 4.Relocation Costs 5.Temporary Accommodation 6.Home Leave 7.School Fees (Temporary visa holders) 8.Sale & Purchase of Home - Incidental Costs including Stamp Duty, Legals & Advertising 9.Leasing of Household Goods 10.Taxi Travel (Home to work & work to home)
Powered by FBT Solutions – FBT & Salary Packaging is what we do!
Understanding FBT
Lifestyle & Family
Liability limited by a scheme approved under Professional Standards Legislation
1.Superannuation 2.In-house Childcare 3.In-house Recreational Facilities 4.Taxi Travel (Home to work & work to home) 5.Public Transport 6.Annual Travel Pass (Post tax) 7.Income Protection Insurance 8.Health services 9.In-house Benefits – Goods and Services (Post tax basis) Powered by FBT Solutions – FBT & Salary Packaging is what we do!
Understanding FBT
Gadgets
Liability limited by a scheme approved under Professional Standards Legislation
1.Notebook Computers 2.Smart Phones 3.Tablets including iPad 4.PDA's 5.Calculators 6.Computer Software Powered by FBT Solutions – FBT & Salary Packaging is what we do!
Understanding FBT
Work Related
Liability limited by a scheme approved under Professional Standards Legislation
1.Professional memberships 2.Subscriptions 3.Newspapers, magazines, journals 4.Self education 5.Home Office Expenses 6.Development Travel 7.Work Related Equipment 8.Tools 9.Uniforms Powered by FBT Solutions – FBT & Salary Packaging is what we do!
Understanding FBT
Not for profits
Liability limited by a scheme approved under Professional Standards Legislation
In addition to all the previous benefits: 1.Wedding & Event Food and Drink costs 2.Wedding & Event Function hire 3.Recreational Travel 4.Credit cards 5.Mortgage & rental 6.Access to specific exemptions 7.Access to specific rebates Powered by FBT Solutions – FBT & Salary Packaging is what we do!
Understanding FBT
What’s coming up….
Liability limited by a scheme approved under Professional Standards Legislation
• 2013 Salary Packaging Essentials Seminars Sydney – Wednesday 29 May Melbourne – Date TBC Brisbane – Date TBC
• Car parking FBT rates for 2013 & retrospective refunds
Australia wide, Representative, Tax Agent sign off
• FBT Returns and payments due 21 May or Tax Agent / ATO extension
• National Accounts Payable Day – Tuesday 1 October 2013
• Managing Employee Expenses, Entertainment & Travel Seminars
Practical training for HR, Finance, Accounts & Tax teams
NATIONAL ACCOUNTS PAYABLE DAY 2013
Liability limited by a scheme approved under Professional Standards Legislation
Time to nominate – recognise & reward! Nominations close Friday 6 September
www.nationalapday.com.au Proudly sponsored by Salary Guru
www.salaryguru.com.au
• National Awards for Best Individual AP person & Best AP team
• Runner up Awards in each category • All winners receive a trophy, prizes
& certificates
NEED AN IPAD?
Complete the feedback form for your chance to win a Mini iPad – winner drawn on 31
March 2013
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