Why lodge an FBT return - even if you think your exposure is small

• Certainty beats ambiguity: Lodging a return starts the amendment clock and gives you a clear, defensible position if questioned.
  
  
• Lower audit risk: A clean return with supporting records sends the right signal; “we didn’t look” does not.
  
  
• Better cost visibility: Allocating costs per vehicle and per person exposes real benefit costs, which helps you tighten policies, set contribution levels, and make smarter fleet/remuneration decisions next year.
  
  
• Consistency with payroll and income tax: A documented FBT process keeps treatment aligned across payroll, director/shareholder accounts, and your general ledger.

What typically triggers FBT attention

• Vehicles with private use (including home-to-work travel in many cases), fuel, rego, insurance and upkeep.
  
  
• Reimbursements to employees for personal or mixed expenses.
  
  
• Entertainment (meals, functions, staff vs client spend).
  
  
• Allowances that mask private benefit.
  
  
• No evidence (e.g., missing logbooks, absent employee declarations).
  
  

Start now: the April deadline comes fast

FBT year runs 1 April to 31 March, which means April preparation is tight, especially if you’re reconstructing records. The heavy lifting is in the admin, and that’s where we can help. Begin gathering:

• A single FBT ledger/worksheet: Capture all potential benefits - cars, fuel, tolls, rego/insurance, reimbursements, entertainment - as they occur, not at year-end.
  
  
• Allocate by employee/vehicle: Per-person and per-vehicle allocation is where time disappears; get this right upfront.
  
  
• Choose and evidence your method: Operating cost vs statutory formula for cars, valid logbooks, employee contributions, and “otherwise deductible” support.
  
  
• Entertainment split: Staff vs clients, on-premises vs off-premises, per-head cost and dates - note details while they’re fresh.
  
  
• Policies and declarations: No-private-use policies (where realistic), living-away-from-home declarations, tool-of-trade usage, etc.
  
  

Tip: If a logbook is required, ensure it’s valid, representative, and current. A “best guess” later won’t withstand scrutiny.

Quick wins we often implement

• Standard coding rules in your accounting/payroll system for motor vehicle, entertainment, and reimbursements helps items land in the right place automatically.
  
  
• Monthly exception reports (e.g., unusual reimbursements, fuel without odometer readings).
  
  
• Employee contributions where private use is clear can reduce FBT and create better behaviour.
  
  

What “good” looks like by April

• A populated, reconciled FBT ledger with costs sensibly allocated.
  
  
• Evidence attached (or linkable) to each claim type.
  
  
• A short FBT position paper (one pager) noting methods used, assumptions, and any employee contributions.
  
  
• A return lodged on time and next year’s process already simplified.
  
  

Need help setting up your FBT ledger and allocations? We can implement a simple, repeatable framework now so April is preparation, not reconstruction.

Important notice: This article provides general information only and does not take your objectives, financial situation or needs into account. Seek professional advice before acting.