The ATO can use information disclosed by businesses in their tax return to identify cases for ATO review from an FBT perspective

For example if a company or trust report Motor Vehicle Expenses in their Tax Return, the ATO may cross-reference this label to determine if an FBT return was lodged. If no FBT return was lodged, the ATO may query whether the return is required. The concern in this regard is that one or more cars may have been provided to an employee for private purposes.

By ensuring you lodge a Fringe Benefits Tax Return as well as your Company or Trust Tax Return it ensures the ATO will not identify you as an employer that needs a closer review.

Of course, the ATO still conducts reviews at random but this will help to minimise your audit potential in regards to FBT exposure.

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