FBT record-keeping overhaul — simplification of obligations
First announced in the 2020–21 Federal Budget, a bill introducing legislative amendments aiming to simplify FBT record keeping obligations received royal assent on 23 June 2023.
Before the introduction of this measure, you were required to obtain and maintain a number of employee declarations and other prescribed forms each FBT year, all before the lodgment due date. With the introduction of this measure, the Commissioner has the power to apply your existing corporate records as substantiation documentation to comply with these record-keeping obligations.
Record-keeping options for employers
Previous law — employers must keep and retain the designated statutory evidentiary documents in the approved form for each fringe benefit for FBT-record keeping purposes.
New law — employers have the option, for each fringe benefit, to:
• rely on adequate alternative records (as determined by the Commissioner) which contain the information required for FBT record-keeping purposes, or
• keep and retain the designated statutory evidentiary documents in the approved form for FBT record-keeping purposes.
Adequate alternative substantiation records
A determination by the Commissioner will provide employers certainty to identify the kind of records that will meet their record-keeping obligations. Factors the Commissioner may specify and consider when issuing a determination will be:
• one or more years of tax
• one or more classes of individuals
• the classes of statutory evidentiary documents applying to the relevant fringe benefit, and
• the kind of alternative documents or records an employer may use to satisfy their record-keeping obligations.
Information sources may include, but are not limited to employment contracts, payroll records, job descriptions etc.
Other matters
Treasury has also released, as per Commissioner’s directive, draft determinations in relation to travel diaries, relocation transportation costs etc, that provide details of the adequate alternative records that will be considered acceptable by the ATO. We anticipate more such determinations to be released in the future.
Please reach out to us if you wish to learn more about these draft determinations.
Contact us
We can assist you with navigating through the changes and prepare a record-keeping checklist for you once more information is on hand.
Should you have any queries, or if you would like to discuss further, please feel free to contact our office.
