ATO issues FBT determinations

The following Fringe Benefits Tax (FBT) determinations have been issued:

·       TD 2017/2: Fringe benefits tax: the record keeping exemption threshold for the FBT year commencing 1 April 2017 is AUD $8,393.

·       TD 2017/3: Fringe benefits tax: The benchmark interest rate for the FBT year commencing on 1 April 2017 is 5.25 per cent per annum.

·       TD 2017/4: Fringe benefits tax: The Determination sets out the cents per kilometre rates that can be used for determining the taxable value of a motor vehicle (other than a car) for the FBT year commencing 1 April 2017.

·       TD 2017/5: Fringe benefits tax: The Determination sets out the reasonable amounts for food and drink expenses incurred by employees receiving a LAFHA fringe benefit for the FBT year commencing 1 April 2017.

·       TD 2017/6: Fringe benefits tax: The Determination sets out the indexation factors for valuing non-remote housing for the FBT year commencing 1 April 2017.

Applicant liable for payroll tax as employer under a “relevant contract”

The NSW Civil and Administrative Tribunal in Sydney Flooring Pty Ltd v Chief Commissioner of State Revenue has held that certain third parties, whose services as flooring installers were made available to the Applicants’ customers, were each engaged by the Applicants under a “relevant contract” within the meaning of s32 of the Payroll Tax Act 2007 (NSW). Accordingly, the Applicant as the employer was liable for payroll tax on taxable wages. Whilst the Applicant argued for numerous contractor exemptions to be applied to the payments made under these contracts, the Tribunal largely found the exemptions were unavailable in light of the absence of supporting evidence. This case affirms the need for taxpayers to present sufficient evidence to support any of the contractor exemptions relied upon.

Applicants not entitled to work related travel expenses

The Administrative Appeals Tribunal (AAT) in Davy v Commissioner of Taxation has affirmed the Commissioner’s decision and held that the Applicant was not entitled to work related travel expenses in excess of travel allowances, as these expenses could not be substantiated and the substantiation exemptions did not apply.

Similarly, in Banks v Commissioner of Taxation the AAT has affirmed the Commissioner's decision to only allow deductions for work related travel expenses based on the reasonable amounts set out in relevant tax rulings as the Applicant failed to provide documentary evidence to substantiate his claims.

Lodging FBT returns

According to the ATO, tax agents can only lodge clients' 2017 FBT returns electronically through the practitioner lodgment service (PLS). To ensure your organisation is covered by the lodgment program, you must appoint a registered tax agent by 21 May 2017. The due date for lodgment of 2017 FBT returns under a tax agent is 25 June 2017 (if the return is lodged electronically) and 21 May 2017 (if the return is lodged by paper). Under the lodgment program, the due date for payment is 28 May 2017.