With the due date for FBT returns prepared by tax agents looming (the deadline is June 25 if lodging electronically), the ATO has released updated versions of five employee declaration forms for the 2016-17 FBT year. Changes to employee FBT declaration forms
These updated forms reflect changes to the FBT laws that took effect on before the last full FBT year commenced (from April 1, 2016).
Which declarations have been updated?
The five employee declaration forms that have been updated for the 2016-17 FBT year are as follows:
|Declaration||Reason for the update|
|Employee’s car declaration||To show that the 331/3% method is no longer to be used.|
|Employment interview or selection test declaration – transport in employee’s car||To reflect the multiple cents per kilometre rates based on engine type and capacity no longer applies.|
|Declaration of car travel to work-related medical examination, medical screening, preventative health care, counselling or migrant language training||To reflect the multiple cents per kilometre rates based on engine type and capacity no longer applies.|
|Relocation transport declaration||To reflect the multiple cents per kilometre rates based on engine type and capacity no longer applies.|
|Remote area holiday transport declaration|
The employer must obtain declarations from their employees by these dates:
|Registered tax agent lodging the FBT return electronically||June 25, 2017|
|Registered tax agent lodging the FBT return by paper||May 22, 2017 (now overdue)|
|Self-lodging the FBT return||May 22, 2017 (now overdue)|
|Not required to lodge an FBT return||May 22, 2017 (now overdue)|
Employee declarations do not need to be sent to the ATO. The employer (taxpayer) is required to retain them as part of their tax records. (Note that the ATO accepts electronic declarations — the declaration must be signed by the employee using an electronic signature.)
What are the declarations about?
Employee’s car declaration. This declaration applies in relation to the “otherwise deductible” rule where:
- the benefit relates to the payment of work-related car expenses
- a log book has not been kept; and
- the benefit constitutes a loan, expense payment, property or residual fringe benefit.
For income tax purposes, from July 1, 2015, car expense deductions available under Division 28 of the ITAA97 were simplified. The cents per kilometre method and log book method has been retained. However, the one-third of actual expenses and 12% of original value method have been abolished. These Division 28 amendments had consequential impacts on FBT.
Where an expense payment fringe benefit is provided in relation to a car owned or leased by the employee, the taxable value is reduced to the extent that an incurred expense would have been deductible to the employee. From April 1, 2016, only the log book method and the no-log-book and no-kilometres method is available for calculating this “otherwise deductible” amount. The no-log-book and no-kilometres method is only substantiated by the use of an employee declaration.
The “otherwise deductible” amount is calculated in the same manner for a loan, property or residual fringe benefit related to work-related car expenses.
This declaration does not apply for car fringe benefits.
Employment interview or selection test declaration – transport in employee’s car. A benefit that meets the costs of travelling to an interview or selection test, in connection with an application for employment with a new employer or a promotion or transfer with an existing employer, is an exempt benefit under s61E of the FBT Act.
If the benefit would be an expense payment fringe benefit but for this exemption, then the employer must obtain documentary evidence of the employee’s expenditure.
Declaration of car travel to work-related medical examination, medical screening, preventative health care, counselling or migrant language training. Section 61F of the FBT Act allows an exemption relating to an expense payment fringe benefit that is the reimbursement of particular work-related car expenses.
The relevant work-related car expenses are ones associated with:
- a work-related medical examination of the employee
- work-related medical screening of the employee
- work-related preventative health care of an employee
- work-related counselling of an employee or of an associate of an employee; or
- migrant language training of an employee or of an associate of an employee.
The benefit is only exempt if an employee declaration is given to the employer by the due date. The exemption is capped at legislated car expense rates.
Relocation transport declaration. An expense payment fringe benefit in respect of relocation transport is exempt under s61B if the benefit constitutes a reimbursement of car expenses and the employee provides a declaration by the due date. The exemption is capped at legislated car rates.
Remote area holiday transport declaration. Transport to enable an employee to go on holiday (including remote area and overseas employment holiday transport) are exempt benefits. Section 60A provides that the exemption of these benefits are subject to a ceiling under certain circumstances. In other circumstances, s61 allows an exemption that is not subject to a ceiling.
You can access all employee declarations from the ATO.
Changes to employee FBT declaration forms Changes to employee FBT declaration forms Changes to employee FBT declaration forms Changes to employee FBT declaration forms