by Roann Castro | Nov 4, 2024 | Business, Uncategorized
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.
by Roann Castro | Nov 4, 2024 | Uncategorized
In today’s dynamic business world, cloud-based bookkeeping has completely transformed how accountants, bookkeepers, and small business owners manage their finances. Here’s how this technology is changing the industry:
1. Accessibility and Flexibility
- Anytime, Anywhere Access: With cloud bookkeeping, you can access your financial data from any device with internet, giving you freedom beyond the office.
- Remote Collaboration: Cloud solutions support seamless teamwork, whether team members are working in the office or remotely, boosting productivity and communication.
2. Cost-Effectiveness
- Lower Infrastructure Costs: Say goodbye to expensive servers or hardware. Cloud bookkeeping services are hosted off-site, cutting down infrastructure costs.
- Subscription Model: Many cloud solutions use a pay-as-you-go model, so you pay only for the features you need—making it a budget-friendly option.
3. Automation and Efficiency
- Automated Data Entry: Cloud bookkeeping software can automatically import bank transactions, saving time and reducing errors from manual data entry.
- Streamlined Processes: Tasks like invoicing and expense tracking are automated, freeing up time for higher-value analysis.
4. Enhanced Security
- Data Encryption: Cloud providers use strong encryption protocols to protect your sensitive information.
- Regular Backups: Automatic backups keep your data safe, reducing the risk of loss from hardware failures or other disasters.
5. Scalability
- Adaptable Solutions: Whether you’re a startup or an established business, cloud bookkeeping can grow with you, meeting your changing needs.
Choosing the Right Cloud Solution When selecting a cloud bookkeeping platform, consider options like QuickBooks Online, Xero, and Wave. Compare their features, pricing, and user reviews to find the best fit for your business. Security Measures: Make sure the provider follows industry security standards and offers solid data protection features.
Cloud-based bookkeeping represents a major shift in managing financial data, offering real-time insights, improved collaboration, and the flexibility needed to thrive in today’s competitive environment. Whether you’re a solo operator or part of a larger team, switching to cloud-based bookkeeping can bring substantial benefits.
Disclaimer: The information provided is for general purposes only. Always consult a certified accountant for tailored advice.
by Roann Castro | Dec 8, 2023 | Uncategorized
The ATO social media pages on Facebook, Twitter and LinkedIn are great resources for tax and super information. People from across the community go to these pages to ask tax and super questions, as you do in ATO Community.
Unfortunately, scammers on Facebook and Twitter have upped their game recently and are responding to some questions and comments on the ATO Facebook and Twitter social media posts, offering support and inviting commenters to direct-message them. These scammers often use profiles that impersonate the ATO and have their name and branding. While the social media teams are removing these posts as quickly as they can and are working with the social media platforms to have these accounts removed, new accounts continue to emerge.
The above picture is an example of an impersonator offering support in the replies of a person’s twitter post. Note they are not using the Official ATO account.
The ATO will never use their social media platforms to ask you to provide personal information or documentation or ask you to make payments. They will only ever communicate with you ‘as the ATO’ on social media with the Official ATO accounts. You can be sure you’re engaging with the ATO on Facebook when you see the blue verification tick next to their name. Similarly, the Twitter account shows a grey checkmark and the word ‘Official’ under their username. You can verify them on LinkedIn by ensuring that the account you’re engaging with:
• has the official ATO logo and organisational name next to the message. Beware of slight variations on their name, like ‘Australia’ rather than ‘Australian’ Taxation Office
• only provides you with email addresses that end with ‘.gov.au’
• doesn’t have typos or grammatical errors in its messages
• has a large number of account followers (almost 200,000 followers at the time of writing).
The ATO does not use other platforms such as Reddit, TikTok and WhatsApp to communicate with you.
ATO Community isn’t totally impervious either. Some users have been registering accounts with NameATO usernames. This makes their responses look like they are from ATO staff members, the ATO Community moderators will remove these when they see them.
If you’re approached by a social media account that is impersonating the ATO, don’t engage with it. You may wish to report posts from these accounts via the message options in each channel. The social media teams are also actively removing and reporting these messages as soon as they’re identified.
There is more information about other tax-related scams and how to report them available on the ATO Community website.
https://www.ato.gov.au/General/Online-services/Identity-security-and-scams/Verify-or-report-a-scam/
by Roann Castro | Dec 8, 2023 | Uncategorized
The Small business technology investment boost
To support the uptake of digital technology, eligible small businesses can claim an extra 20% tax deduction. This is to help businesses grow by investing in digital operations. Remember – to claim the boost for a depreciating asset, you must have had it installed by 30 June 2023.
The Small business skills and training boost
Eligible small businesses can also claim an extra 20% deduction to help cover the cost of training employees. You can claim deductions for external training courses taken by both new and existing employees, either in person or online. So long as the course is delivered in Australia, by providers registered in Australia.
For all the info you need on claiming the bonus deductions in your tax return, visit the ATO Community website.
https://www.ato.gov.au/Business/Income-and-deductions-for-business/Deductions/Small-business-technology-investment-boost/
