#Issue 17
The National Tax Liaison Group (NTLG) FBT sub-committee recently met and included in their discussions was an update by the ATO on FBT audit/compliance activities.
In Issue #8 of The Assessment (1 April 2008), ‘Cars in the firing line’, we warned of the ATO crackdown on car benefits via a specific project. Well it seems that once again cars are in the firing line!
Although the minutes from the meeting are yet to have been released, discussions with senior ATO FBT officers have resulted in the following information being provided - we thank these officers for their input:
- the Tax Office is currently undertaking the following risk and compliance activities:
o Car benefits - FBT compliance activities have significantly increased compared to prior years
o External data used for data matching has been refreshed and computer programs to process new and expanded information have been refined.
- in addition to FBT specific reviews or audits:
o employer obligation reviews will include fringe benefits tax
o micro complex compliance and small and medium enterprises field staff will continue to examine FBT issues during their income tax audits
o goods and services tax field staff will identify FBT issues during their reviews.
It is critical to note that FBT will now form a specific component of other taxation reviews with ATO audit/review officers passing on their findings to the FBT audit team. The limited resources of the FBT audit team has historically meant the SME sector largely operated free from FBT scrutiny. The game is clearly changing.
The Tax Office is finding through data matching and compliance verification that seven out of every 10 taxpayers that are investigated are non compliant. On average this results in a FBT liability of $77,380 and a general interest charge of $19,336. Where cases are escalated and assessments are issued the average penalties are $38,000 per case.
It is interesting to note that this newsletter edition coincides with the following recent announcement made in the Commonwealth of Australia Gazette No. GN 13, 8 April 2009:
Records relating to approximately 2.5 million individuals who have purchased a motor vehicle valued at $10,000 or higher will be matched with certain sections of Tax Office data holdings. The Tax Office will collect details from the following sources:
- New South Wales - Roads and Traffic Authority, NSW
- Queensland - Queensland Transport
- Victoria - Vic Roads
- Tasmania - Department of Infrastructure, Energy and Resources
- South Australia - Department for Transport, Energy and Infrastructure (Transport SA)
- Western Australia - Department for Planning and Infrastructure
- Northern Territory - Northern Territory Department of planning and infrastructure (Transport Division), and
- Australian Capital Territory - ACT Road Transport Authority, Road User Services, Urban Services.
This project will enable the Tax Office to identify non-compliance with lodgment and debt payment and also to be more strategic in its approach to its business activities.
Now that 31 March has passed employers will be busily gathering the information necessary to complete the 2009 FBT return. As the focus on FBT compliance appears to be gaining momentum each year it is imperative that systems (and required knowledge levels) are put in place so as to avoid nasty surprises should the ATO FBT audit team come knocking.
This edition of ‘The Assessment’ was prepared by Rob Power. If you have any comments in regards to the contents of this edition, or if you have any specific FBT queries or re require an independent FBT review please feel free contact Rob at robp@webbmartinconsulting.com.au.
