24 Oct 07 FBT compliance: car benefits and implications for tax agentsThe ATO has advised that 2 major projects are being undertaken to ensure that employers are meeting their fringe benefits tax (FBT) obligations in relation to employee car benefits.
One project is in relation to employers who attribute a high level of business use to a luxury car. Employers identified as high-risk, and their tax agents, will receive a letter regarding the tax treatment of their business-owned luxury cars plus a request for information. Where employers lodge an FBT return and pay the FBT liability on time, the response will be treated as a voluntary disclosure. Failure to provide the information could result in an audit.
The other project relates to all business-owned cars and FBT lodgments over the past two years. The ATO wants to understand and quantify the risk in this area. Letters associated with this project will include a questionnaire requesting information about business-owned cars over the past 2 years. The questionnaire may reveal an FBT liability and the ATO encourages voluntary disclosure. As an incentive to complete and return the questionnaire promptly, no penalties and GIC will apply when the questionnaire, plus FBT return and payment, are returned and lodged on time. Note that the penalty and GIC concessions will not apply if an audit is commenced.
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