2017 FBT FAQs

To assist the Employer in determining the Fringe Benefit Value of vehicles provided this FBT year, Autopia has attempted to obtain a Fringe Benefit Tax (FBT) declaration from each of your Employees on AutoPackage.

You should verify that you have collected either:
sufficient post-tax Employee Contributions to eliminate the Fringe Benefit Value and/or sufficient pre-tax FBT Allowance Contributions to cover the FBT value of each vehicle. If you have been using post-tax Employee Contribution method…

1. Run a payroll report to determine the total post-tax Employee Contributions collected between the FBT year start date (column R) and the FBT year-end date (column T).

2. Ascertain whether the total Employee Contributions are equal to or more than the Fringe Benefit Value.

– If they are, you have successfully eliminated any Reportable Fringe Benefit on the vehicle and there is no FBT payable.

– If they are less than the Fringe Benefit Value you will either need to:
i.    Make a one-off payroll adjustment to adjust the post-tax Employee
Contributions retrospectively, effectively eliminating the Fringe Benefit liability and any resulting FBT on the car. (You can use our
FBT Calculator 2017 to assist with this – DOWNLOAD HERE) Or…

ii.   Declare the resulting FBT liability on the vehicle in the company FBT return. FBT payable is calculated using the following formula:

(Gross Fringe Benefit Value – post-tax Employee Contributions for
the FBT year) x 0.49 x 2.1463

Deduct the value of the FBT from the Employee’s pre-tax salary
in the next available payroll (if possible).

If you have been using gross up/pre-tax FBT Allowance method…

1. Calculate the FBT liability on the vehicle using this formula:

(Gross Fringe Benefit Value – pre-tax FBT Allowance Contributions for the FBT year) x 0.49 x 2.1463

Include this vehicle in your FBT return. Employer will incur FBT on this vehicle.

2. Run a payroll report to determine the total pre-tax FBT Allowance Contributions collected between the FBT year start date (column R) and the FBT year-end date (column T).

– If the total pre-tax FBT Allowance Contributions collected is more than the FBT liability on the vehicle, you may choose to credit any surplus to the Employee pre-tax in the next payroll.

– If the total pre-tax FBT Allowance Contributions collected is less than the FBT liability on the vehicle, deduct the deficit amount from the Employee pre-tax in the next payroll.

Due to the timing of Employer’s payroll, Autopia’s invoice cycle, changing FBT statutory rates, days available in the FBT year and a range of other factors, Employee’s salary deductions will rarely exactly match the Fringe Benefit Value of the vehicle.

There is no concern for alarm here and any mismatch can be managed by following the instructions in Q2

It is the Employer’s responsibility to communicate any salary adjustments to the Employee concerned. If Employees seek further clarification having spoken to Employer’s payroll, they can contact their personal Autopia consultant for further information.

Autopia is in regular contact with employees throughout the year, keeping them informed of their liabilities and trending.

31st March: Employees were sent an email instructing them to make a declaration for the 31st March. Once a declaration was received, it was forwarded to the employee for them to double check the values. Employees were also sent a SMS advising them it is imperative that they make a declaration.

4th April: A reminder email was sent to employees that had not yet completed the declaration.

6th April: Employees were sent an email and SMS instructing them the closing date for declarations was 8th April.

4th – 8th April: Autopia followed up employees who had not yet completed the declaration and took a telephone recorded declaration where possible.

Refer to FAQ2

You must lodge a FBT return if you have a FBT liability during a FBT year. Whilst your FBT liability in relation to novated leases may be zero, you may have other FBT liability obligations.

Please refer to: ato.gov.au/General/Fringe-benefits-tax-(FBT)/How-to-report,-lodge-and-pay-FBT/

Your Fringe Benefit Report indicates whether we have obtained a declaration from your Employee (Column C – ‘Declaration completed’).

If we have been unable to obtain a declaration, Autopia has made an estimate as to the gross Fringe Benefit Value of the vehicle for the period. You may wish to obtain a declaration from that Employee so that we can update our records.

Only if the Employee is utilising the Operating Cost Method. Autopia does not hold Employee’s logbooks. If Operating Cost is identified on the FBT report, you will need to ensure that you hold the Employee’s logbook verifying their declared business use %.

Please refer to: ato.gov.au/General/Fringe-benefits-tax-(FBT)/In-detail/Employers-guide/Fringe-benefits-tax-record-keeping/

For your information this is the declaration that an Employee makes:

I declare for the YEAR MAKE MODEL (registration: ABC123) that:

• the period of the FBT tax year the car was in use by me for business purposes was: 01-Apr-2016 to 31-Mar-2017
• logbooks and odometer records for the car (or a car which this car replaces) were kept for a minimum of 12 consecutive weeks during that period and have been given to the employer; or
• logbooks and odometer records for the car (or a car which this car replaces) were kept for a minimum of 12 consecutive weeks in an earlier year, and odometer records were kept this year and have been given to the employer;
• the car business usage for the period of 01-Apr-2016 to 31-Mar-2017 was: XX.XX %

During the Employee’s initial consultation, prior to committing to the lease, the employee would have provided information on how they use their vehicle.

Based on this information, Autopia would have tailored the employee’s AutoPackage in the most tax effective way and Employees would have elected the optimum method at the time.

This method may have been overriden when the Employee made their FBT declaration if a more tax-effective FBT method was available based on their actual usage.

The Employee has made a statutory declaration that the vehicle was unavailable for private use. Autopia has not verified the legitimacy of claimed days unavailable as this is ultimately Employer’s responsibility.

In order to decide how many days to declare a vehicle unavailable, the Employee has been provided with the following instruction:

One of the factors in determining the extent of FBT liability is the number of days that the vehicle is made available for your use. Any days in the FBT year that the vehicle is not made available to you will reduce the FBT liability associated with the vehicle, examples as follows:

• The vehicle is garaged at your employer’s premises whilst you are on holidays or away on business, the keys are held by your employer and the vehicle is not available for private use by any other staff or associate.Unavailability commences the day after you park your vehicle at your employer’s premises and ceases the day prior to when you pick up your vehicle.
• The vehicle is at a smash repairer after an accident. Unavailability commences from the first whole day that the vehicle was not available for use following the accident and ceases the day prior to collection.
• The vehicle is in a workshop for extensive repairs (for example, a significant warranty repair). However, a vehicle is considered to be available for private use where it is in the workshop for routine servicing or maintenance. Unavailability excludes both the day of drop off and collection.

As a general rule, unavailability occurs when you or any associate (either your family or other staff) do not have use of the vehicle and the keys to the vehicle are in the control of your employer. In all cases unavailability commences from the first whole day that the vehicle was not available for use (midnight to midnight).

Days unavailable can only be claimed during the period in which the vehicle is held – in the case of a leased vehicle during the term of the lease.

If the vehicle was sold during the year only include the period up to that date in your calculations.