Our FBT review for 2010
FBT return season is about to begin. For most employers this means that FBT returns should soon be on your radar.
FBT return due dates
Inland Revenue should automatically send you the applicable FBT return form well before the filing due date.
Quarterly FBT returns (IR 420)
- Q1 FBT return | period from 1 Apr to 30 Jun | due 20 Jul
- Q2 FBT return | periof from 1 Jul to 30 Sep | due 20 Oct
- Q3 FBT return | period from 1 Oct to 31 Dec | due 20 Jan
- Q4 FBT return | period from 1 Jan to 31 Mar | due 31 May
Annual FBT return (IR 422)
- Full year return | period from 1 Apr to 31 Mar | due 31 May
FBT return preparation
Those of you who have been through an FBT compliance cycle before will know that leaving it to the last minute isn’t a great idea, even if you only have a couple of employees or very few benefits. For those of you about to go through a 31 March year end as well don’t let FBT fall off the radar.
If you run short of time (and if you have the option) you may be less inclined to attribute benefits and more inclined to pay FBT at the flat 61% rate, simply because it is easier. In our experience, paying at 61% can have a significant cash cost penalty over attributing so you don’t want to end up paying it just because you ran out of time. At the least, you should consider the “short form alternate-rate calculation”.
We suggest starting at least 15 working days before the due date – more if your team is inexperienced or if you are using spreadsheet or paper-based calculations.
Collating data
The first step is collating the data you need to complete the return. Sourcing this data for a final quarter or annual return attribution calculation will usually involve accessing several systems as you need payroll and expenditure information and may need detail around motor vehicle loan calculations etc. This is often the most time consuming or delaying part of the process so we recommend you start collating data as soon as is practical.
Calculations
Unless all of your employees earned more than $70k in the year, attribution will save you cash. Correctly utilising motor vehicle pooling rules, de minimis rates and non-attributed benefits will further mitigate FBT payable, although it can be tricky if you are not familiar with the rules.
Checking your work
We recommend sense checks and a second set of eyes as a minimum. Reviewing benefits per employee, employees per benefit, employees who left during the year and non-attributed benefits will help flush out any anomalies or things you may have missed.
Filling out forms
The forms are fairly simple, just remember that the final quarter return is on the same IR420 form as you used for the first three quarters, you just complete it in a slightly different way.