13 Mar 14
FBT returns and the 85% requirement
MEMBER 20 writes:
"With the 85% and FBT forms the ATO advises as follows:
'If an agent fails to lodge 85% of their clients FBT returns on-time for this year, they will not have access to the lodgment program FBT concessional due date for the following year, until the performance benchmark is reached.' (Emphasis added)
Like many TAGs with small business we do very few (in comparison with ITRs) FBT Returns, because we have clients who keep out cars from their company or trust, or ensure a reimbursement is dealt with for the private use so no FBT liability. Saves us time and the client money in doing a FBT return. Recently I had an employer obligation audit and, because the auditor did not agree with a log book entry, they said the log book was invalid, and we therefore had to lodge FBT forms using the statutory method. the ATO demanded I lodge 4 years' FBT (they are being objected to, and we will appeal if necessary) but we were assured by the ATO it is for educational purposes and to encourage compliance, apparently. If I did not lodge the forms, the client was to get FTL penalties.
The upshot for the 85% rule is I have lodged 4 FBT forms late, so to lodge 85% on time I need to lodge another 24 FBT returns. But I only have about 10 to do.
Therefore I lose my lodgment concession next year, nice one.
My clients next year will have to lodge and pay earlier, no fault of theirs, and certainly I don’t think it is a failure of my practice in doing work on time.
Or do I lodge Nil FBT forms and reach my target (a bit like ITRs, a TAG deletes them as a client and therefore reaches the 85%).
This 85% rule is plain silly."