Legal

Fringe Benefits Tax Guide Basics you Shouldnt Miss

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When you are running a business, hiring staff is one of the basic requirements. And for keeping those employees, you are likely offering them some perks. If you agree with that and do the same, it is essential to get familiar with the FBT (Fringe benefits tax). These benefits cover whatever you pay to your staff apart from the monthly wages or salary.

What is Fringe Benefit?

You read the definition of FBT above. It covers things like:

  • Discounted loans
  • Cars (rented or owned by the company) that employees can use
  • Arrangements for salary sacrifice
  • Gym membership
  • Accommodation or housing and LAFH (living away from home) allowances
  • Reimbursing expenses like school fee
  • Employees’ debt release
  • Employees’ private expenses that the company has reimbursed or paid

However, this term excludes all those important work items such as protective clothing, tools, mobiles, and laptops.

When would a Fringe Benefits Tax is Applicable?

Vehicles like Cars: An electrician, a salesperson, or a business manager might be using the company’s vehicle for business travels. However, if the employee uses the vehicle for personal use (anything except for work) or on a non-working day, that would be covered under the fringe benefit.

Entertainment and Meals: Any expense on meals planned to sign contracts with potential clients or current customers falls under the fringe benefits tax definition.

When to Register for FBT?

Since you are clear about the term, you should register for it if you are offering any such benefit. However, using a trust (or another company) to run your business puts you on the list of employees. Any benefits you avail of in such a position would fall under the list of tax obligations.

This can go confusing if you don’t have complete knowledge. However, Sydney accounting services can help you calculate and file an accurate FBT return for business benefits.

Legal

Different Types of Accounting Services

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There are various types of accounting services that are available in today’s business environments. These services can be enlisted as:

  • Bookkeeping Accounting Service
  • Chartered Accounting Service
  • Tax Accounting Service
  • Financial Controller Services
  • Forensic Accounting Services

Though all of them are based on the same principles of accounting, they vary on the basis of specialized, additional knowledge that is required for each of them. Let’s briefly look into them one by one.

  • Bookkeeping Accounting Service: Bookkeeping accounting service includes the basic tasks in accounting that are required to be done to maintain the accounting records. It may also include tasks related to creating financial reports.
  • Chartered Accounting Service: Chartered accounting service is usually affiliated to chartered accounting bodies such that the chartered accountant is a licensed member of this body. Chartered accountants possess specialization in various forms of accounting and can help the management make key decisions about the company.
  • Tax Accounting Service: Tax accounting service, as the name suggests, are accounting professionals that helps with taxation related requirements of the businesses. Tax accounting professionals help you negotiate with the tax-enforcement authorities at all levels.
  • Financial Controller Services: Financial controller services support you in a variety of areas, such as the assignment of tasks, managing personnel, external stakeholder management, etc.
  • Forensic Accounting Services: Forensic accounting is mainly used to maintain the integrity of your business accounts. There are accounting bookkeeping services in Sydney that can not only help with bookkeeping but also with any kind of forensic accounting.