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FBT and Electric Vehicles: Key Changes and Deadlines for 2025

FBT and Electric Vehicles: Key Changes and Deadlines for 2025

by | Mar 5, 2025 | Taxation

The Australian Taxation Office (ATO) has introduced key changes to Fringe Benefits Tax (FBT) exemptions for electric vehicles (EVs) in 2025, impacting businesses and employees who benefit from employer-provided EVs. Understanding these updates is crucial for businesses looking to manage tax obligations effectively while leveraging EV incentives.

Changes to Electric Vehicle Exemptions

The FBT exemption for eligible EVs has been a significant incentive for businesses adopting sustainable vehicle options. However, in 2025, modifications to eligibility criteria and compliance requirements mean businesses must reassess their current fleet policies.

Key Updates:

  • Revised Eligibility Criteria: Some EV models may no longer qualify for FBT exemptions due to updated pricing thresholds and specifications.
  • Luxury Car Tax Considerations: Vehicles exceeding the defined luxury car tax (LCT) threshold may now attract FBT, increasing costs for businesses.
  • Reporting and Compliance: Employers will need to ensure accurate reporting to align with ATO requirements, including proper valuation and documentation of exempt benefits.

ATO Announcements and FBT Deadlines

The ATO has also released important deadlines for FBT returns and payments for the 2024–25 financial year:

  • FBT Year-End Date: 31 March 2025 – Businesses should ensure they have accurate records of fringe benefits provided during the financial year.
  • FBT Return Due Date: 21 May 2025 (for self-lodged returns).
  • FBT Payment Deadline: 28 May 2025 (for payments associated with lodged returns).
  • Lodgment via Tax Agent: If using a registered tax agent, businesses may have extended deadlines, but it is essential to confirm individual lodgment dates.

How These Changes Affect Businesses

For businesses that provide EVs to employees, these updates may impact financial planning and fleet management strategies. Employers must:

  • Review existing EV benefits to determine continued eligibility for exemptions.
  • Assess the cost implications of non-exempt vehicles.
  • Stay updated with ATO guidelines to ensure compliance and avoid unexpected tax liabilities.

With these changes, businesses should work closely with their accountants to evaluate the tax impact and explore alternative solutions. Lowrys Accountants can help navigate these FBT updates, ensuring compliance while maximising tax efficiency.

For tailored advice on managing your FBT obligations and meeting ATO deadlines, contact Lowrys Accountants today.

Don’t Miss These Key ATO Deadlines: BAS & IAS Due in February 2025

Don’t Miss These Key ATO Deadlines: BAS & IAS Due in February 2025

by | Feb 18, 2025 | Taxation

As we settle into the new year, it’s crucial for business owners to stay on top of their tax obligations. The Australian Taxation Office (ATO) has set key deadlines for February 2025 that require your attention. Failing to meet these deadlines can result in penalties, so ensure you’re prepared ahead of time.

Important Dates to Remember

21 February 2025 – Monthly BAS Lodgment & Payment

If your business lodges Business Activity Statements (BAS) on a monthly basis, your December 2024 BAS is due for lodgment and payment by 21 February 2025. This applies to businesses registered for GST that report monthly.

28 February 2025 – Quarterly BAS & IAS Deadline

For businesses lodging on a quarterly basis, the October–December 2024 BAS must be submitted and paid by 28 February 2025. Additionally, if you are required to lodge a monthly Instalment Activity Statement (IAS) for Pay As You Go (PAYG) withholding tax, the January 2025 IAS is also due on this date.

Why Meeting These Deadlines Matters

Timely lodgment and payment of your BAS and IAS help you:

  • Avoid ATO penalties and interest charges
  • Maintain a good compliance record
  • Keep accurate cash flow planning for your business

ATO Updates & Announcements

The ATO regularly provides updates on tax obligations and potential changes to reporting requirements. If there are any recent announcements regarding lodgment extensions, payment deferrals, or relief measures, ensure you stay informed through official ATO communications.

Need Assistance? Lowrys Accountants Can Help

Navigating tax obligations can be complex, but you don’t have to manage it alone. At Lowrys Accountants, we provide expert BAS and IAS lodgment support, ensuring you meet your tax responsibilities on time and without hassle. If you have any concerns about your upcoming deadlines, reach out to us for guidance and tailored advice.

📩 Get in touch today to ensure your BAS and IAS are lodged on time!

Unlocking Fringe Benefits Tax (FBT) for Australian Employers: 2024-25 Guide

Unlocking Fringe Benefits Tax (FBT) for Australian Employers: 2024-25 Guide

by | Nov 4, 2024 | Business, Taxation

Fringe Benefits Tax (FBT) can often feel complex and daunting for Australian employers, but understanding it is essential to ensure your business remains compliant and avoids costly penalties. This guide breaks down FBT, explaining how it works and what you need to know for the 2024-25 tax year.

What Is FBT? FBT is a tax paid by employers on certain benefits provided to employees, their families, or associates. These benefits, known as “fringe benefits,” can include anything from company cars to low-rate loans, entertainment, or gym memberships.

Key Changes for 2024-25 The 2024-25 tax year brings some updates to FBT rules that employers should be aware of, including:

  • Exemptions for Electric Vehicles (EVs): If your business provides employees with electric vehicles, these may be exempt from FBT, provided the EV meets specific criteria.
  • Car Parking Benefits: The threshold for exempt car parking benefits has increased, and it’s crucial to assess how this might impact your FBT obligations.

Common Fringe Benefits Some of the most common types of fringe benefits include:

  • Car Benefits: If you provide an employee with a vehicle for private use, FBT applies.
  • Loan Benefits: Offering low-rate or interest-free loans to employees is considered a fringe benefit.
  • Expense Payments: Paying for employees’ personal expenses, such as school fees or rent, is subject to FBT.
  • Entertainment: Providing entertainment, such as meals or tickets to events, can also attract FBT.

Calculating FBT To calculate FBT, you need to determine the taxable value of the benefit provided. This involves considering factors like the employee’s use of the benefit and whether any employee contributions were made.

The FBT rate for the 2024-25 tax year remains at 47%, and the gross-up rate depends on whether the benefit is subject to GST:

  • Type 1 Benefits (GST credit available): Gross-up rate is 2.0802.
  • Type 2 Benefits (GST credit not available): Gross-up rate is 1.8868.

Recordkeeping and Reporting Accurate recordkeeping is essential to comply with FBT requirements. Employers need to keep documentation that clearly outlines the benefits provided, their value, and any employee contributions. FBT returns are lodged annually, with payment due in May each FBT year.

  • FBT calculations and lodgements
  • FBT exemption advice
  • Minimising FBT liability through tax planning

How Lowrys Can Help FBT compliance can be complex, but at Lowrys, we offer expert guidance to help you navigate these regulations smoothly. Our team can assist with:

Stay ahead of your FBT obligations with Lowrys by your side.

Know your FBTs

Know your FBTs

by | Dec 6, 2023 | Business, Taxation

If you’ve been giving your employees perks like car parking or gym memberships, you should consider the fringe benefits tax (FBT) implications.

These extras can be a great bonus on top of salary and wage income. But did you know they may be subject to FBT?

Keep in mind that everything in the list below could be subject to FBT:

• allowing an employee to use a work car, including a dual cab ute, for private purposes
• car parking
• tickets to concerts, shows or sports events
• reimbursed school fees
• discounted loans
• salary sacrifice arrangements with staff.

If you’re giving your staff extras that are subject to FBT, take these four steps:

• Identify the types of fringe benefits you give your staff
• Determine the taxable value using approved valuation methods relevant to each fringe benefit
• Lodge an FBT return by the due date (that may be a little later if your tax agent lodges online for you).
• Keep records that show your calculations and support your FBT position.

Knowing your FBTs starts with understanding how FBT works. Keen to learn more? Check out the website below or talk to your trusted tax professional for the best advice on managing your FBT obligations.
https://www.ato.gov.au/Business/Fringe-benefits-tax/?=redirected_fbt