With the 2025 fringe benefits tax (FBT) period set to end on 31 March, the Australian Taxation Office has reminded businesses and other employers of the upcoming changes in the FBT for the new year onwards which may affect their tax obligations.
Alternative record keeping changes
This FBT year and onwards, the ATO has allowed employers to present existing records instead of travel diaries and declarations for some fringe benefits. The definition of what constitutes an existing record varies depending on the fringe benefit in question as provided by their respective legislation.
The ATO has a useful page explaining alternative records, with examples.
Clients may prefer to continue using the current approved forms or have the choice of using a combination of both methods for each employee and each benefit. And if existing corporate records are to be used, they need to meet the minimum required information at the time of lodging the FBT return.
Plug-in hybrid electric vehicle changes
The FBT exemption for plug-in hybrid electric vehicles (PHEVs) ends on 31 March. However, an employer can continue to apply the exemption, provided that they meet the following conditions:
- that the PHEV was used, or available for use, before 1 April 2025 (and that use was exempt), and
- that they have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025.
Employers that have provided fringe benefits to their staff between 1 April 2024 and 31 March 2025 are advised to keep the appropriate and accurate records so they can correctly calculate the taxable value of the benefit and support their FBT position.
More information on the FBT changes can be found at the ATO’s website.
This article was first published on sibling website Inside Small Business.
