For small and micro business owners, keeping on top of your Fringe Benefits Tax (FBT) obligations isn’t just about ticking a box—it’s a crucial strategy to limit your future audit risks and secure your business’s financial health. Even if you believe your FBT liability is nil, lodging an FBT return can protect you from the ATO’s far-reaching audit powers.
Why FBT Returns Matter
FBT applies to non-cash benefits—such as business cars, meal entertainment, and living-away-from-home allowances—provided to employees in addition to salary or wages. The ATO uses advanced data matching techniques, including information from Single Touch Payroll (STP), BAS, and tax returns, to pinpoint inconsistencies in FBT reporting. With their compliance efforts ramping up, even a small oversight could trigger an audit.
Limit Your Audit Window
One of the greatest risks for businesses that fail to lodge FBT returns is that the ATO can potentially audit your records back to the inception of your business . By lodging your FBT return—even a Nil return—you significantly limit the ATO’s audit window (typically to the last three years), reducing the chance of costly penalties and compliance reviews.
The ATO’s Increased Focus on FBT
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Random Enquiry Program (REP):
The ATO is randomly auditing businesses of all sizes to ensure compliance with employment tax obligations, including FBT.
Learn more about the REP here citeturn14file (for reference) -
Data Matching:
The ATO is leveraging data from multiple sources to identify discrepancies. Even minor errors in FBT reporting can lead to further enquiries. -
FBT Gap Concerns:
With estimates showing the FBT gap exceeds $1 billion, the ATO is dedicating more resources to close this gap. This means every business must take its FBT obligations seriously to avoid unexpected liabilities.
Check out the latest FBT gap trends citeturn14file (for reference)
Who Needs to Lodge an FBT Return?
If your business provided any fringe benefits to employees or their associates between 1 April 2023 and 31 March 2024 — like a company car, entertainment, or paying private expenses — you may be required to lodge a Fringe Benefits Tax (FBT) return. This applies even if you’ve already paid FBT instalments during the year. Lodging a return is also a key step in protecting your business from ATO review risks.
Not sure if you’re impacted? Check the ATO’s guide to how FBT works and who it applies to.
The Benefits of Proactive FBT Management
Protect Your Business from Risk
Filing your FBT return on time—even if no FBT is payable—reduces your exposure to an audit. By demonstrating that you’ve reviewed your fringe benefits thoroughly, you lower the chance that the ATO will revisit your FBT history.
Streamline Your Tax Process
Our expert team at Business Edge Advisors uses streamlined processes and tools like Seamls Fetch to help you quickly and accurately complete your FBT questionnaire. This not only saves you time but also minimizes the administrative burden while ensuring you meet all ATO requirements.
Secure Your Future
Proactive FBT management means fewer surprises and more predictable tax outcomes. With the ATO’s heightened focus on compliance, taking action now can prevent costly audits and penalties down the road.
Take Action Today
Ready to protect your business? We’ve made it simple to get started:
For Existing Clients:
Complete Your FBT Questionnaire
(Click the link to access your Seamls Fetch form. Answer the basic Yes/No questions. If all answers are “No,” a Nil FBT return will be filed; if any are “Yes,” you’ll be prompted to complete additional Excel worksheets.)
For New Clients:
Get Started with a Free FBT Consultation
(Fill out our quick lead form to learn how we can help you manage your FBT obligations and safeguard your business.)
By lodging your FBT return now, you not only comply with ATO regulations but also significantly limit your audit exposure—protecting your business from the risk of the ATO reviewing your records back to your businesses inception.
For further details on FBT compliance, visit the FBT Rates and Thresholds page
