How to file fewer FBT returns
Navigating the complexities of Fringe Benefit Tax (FBT) returns can be a challenge for small businesses, but a streamlined approach is avaliable and offers a welcome relief. For eligible businesses, there’s an option to file returns on an annual basis rather than the default quarterly schedule.
Annual FBT returns explained
Small business option
Small businesses that meet specific criteria may elect to file an annual FBT return (IR422) instead of quarterly FBT returns (IR420). To qualify, your previous year’s gross tax and ESCT must not exceed $500,000; or you were not an employer in the prior year.
It’s essential to make your election before certain due dates — if Inland Revenue does not receive your election on time, you will have to file quarterly returns for the entire FBT year. For existing employers, this election must be submitted by June 30 of the relevant tax year, whereas new employers have until the last day of the quarter in which they first begin employing staff.
Close company option
There’s another pathway with the income year FBT return (IR421), specifically designed for close companies. This return is similar, but is for non-standard balance dates, and is available if your company has shareholder-employees only and your annual gross tax and ESCT remain below $500,000.
Alternatively, if your closely held company provides motor vehicles for private use to shareholder-employees—and this benefit is restricted to two vehicles—you may also qualify for this option.
This return covers your company’s accounting year and needs to be filed by the due date for end-of-year income tax payments.
Embracing technology
Simplify your filing process further by using our FBT software, specifically designed to manage both annual and income year FBT returns.
Our solution offers a fast, efficient way to complete your filings while ensuring precision in your calculations and providing detailed documentation for all attribution processes—a key factor in maintaining compliance and reducing administrative burdens.