CPN Breakfast Briefing Series FBT & Employment Taxes Update. Helping you navigate your compliance for 2016

Transcription

1 CPN Breakfast Briefing Series 2016 FBT & Employment Taxes Update Helping you navigate your compliance for 2016 April 2016

2 Agenda for presentation Key Dates and Statistics Legislative changes Rulings, Interpretative Decisions and FBT rates/thresholds Cases Common issues Preparing your FBT return ATO compliance activity

3 Key Dates FBT year end 31 March 2016 Lodgement date 21 May 2016 Payment date 28 May 2016 Tax agent lodgement date 25 June 2016

4 Fringe Benefits Tax TABLE 2.6: ATO net cash collections, to

5 Legislative Changes

6 Increase in the FBT rate Type 1 rate FBT rate 49% Type 2 rate Temporary Budget Repair Levy Caps for FBT exempt/rebatable FBT rebate to 49% $31,177 $17,667 Reportable fringe benefit gross up rate to

7 Salary Packaging Entertainment Meal Entertainment Salary Packaged Entertainment $5,000 cap (grossed up) 50 / 50 or register method not available Entertainment Facility Leasing Expenses Reportable benefit Rebatable and FBT Exempt Employers

8 Rulings and Interpretive Decisions

9 Rulings and Interpretive Decisions ATO ID 2015/25 Exempt residual benefits the provision, or use, of a recreational facility TD 2015/12 FBT: duties of employment in connection with public or non profit hospital

10 ATO ID 2015/25 In house gyms and personal or group training?

11 What about work related counselling? Safety Health Fitness Stress Management Personal Relationships Retirement Problems Drug or Alcohol Abuse Improve or maintain the quality of the performance of the employee s duties Work Related Trauma Prepares employees for retirement First Aid

12 TD 2015/12 Duties performed by an employee of a government body exclusively In connection with in

13 Common FBT rates and thresholds 2015/16 Cents per kilometre rates for residual motor vehicles cc: 51 c/km Over 2500cc: 61c/km Motorcycles: 15 c/km Benchmark interest rate 5.65% (from 5.95%) Car parking threshold $8.37 (from $8.26)

14 Common FBT rates and thresholds 2015/16 Reasonable food rates within Australia Family size Rate ($)

15 Cases

16 Hunger Project case Relief Institution

17 John Holland case John Holland Group Pty Ltd v FCT [2015] FCAFC 82 1 week R &R 2 weeks

18 Case studies Business travel

19 Business travel Weekends Weekdays

20 Case studies Vehicles

21 Vehicles General concepts Fewer than nine passengers Carrying capacity < 1 tonne

22 Vehicles Exemptions Not principally designed for passenger use Not a car Private travel other than home to work is minor and infrequent

23 Employer fleet

24 Employer Fleet FBT? Car Benefit? Exemption? Reduction? Substantiation? Reportable?

25 Dual cab utes

26 Dual Cab Ute FBT? Exemption? Type of vehicle? Reduction? Substantiation? Reportable?

27 Case studies Entertainment

28 Overseas Trips with Clients

29 Overseas Trip with Clients FBT? Duties of employee? Participation in events? Exemptions? Substantiation? Reportable?

30 Promotional Event

31 Promotional Event Open to the public Not open to the public FBT? If so, on all costs? All employees? Exemptions? Reportable?

32 Spring Racing Event

33 Spring Racing Event Employer Marquee Supplier Marquee FBT? If so, on all costs? All employees? Exemptions? Reportable?

34 Preparing your FBT return

35 Preparing your FBT return Understand any changes Understand your risk areas Review documentation to identify all benefits Internal discussions with other business groups Request other substantiation/declarations Complete and sign elections and declarations

36 ATO Compliance Activity

37 ATO Compliance Activity Data Matching Vehicles 2014, 2015 and 2016 financial years Greater than $10,000 (2.8 mil individuals estimated) Sold, transferred or newly registered motor vehicles Not registered, no return lodged or no car benefits Deductions, GST, fringe benefits tax, luxury car tax, fuel schemes and income tax LAFHA focus Temporary residents (i.e. expats, data match with immigration records) 12 month rule Employer Obligations audits Common law employee

38 Wrap up

39 Disclaimer The information contained in this presentation is illustrative, of a general nature only and is not intended to address the circumstances of any particular taxpayer. This presentation is not to be used or treated as professional advice in any way and readers should obtain their own advice on matters discussed therein. Whilst every effort has been made to ensure the accuracy of the comments made in this presentation the author and Pitcher Partners disclaim all responsibility and liability (including, without limitation, for any direct or indirect or consequential costs, loss or damage or loss of profits) arising from anything done or omitted to be done by any party in reliance, whether wholly or partially, on any of the information in this presentation. Any party that relies on the information in this presentation does so at its own risk.

40 PROFILE Ali Suleyman Partner/Executive Director Tax Consulting ali.suleyman@pitcher.com.au Professional Background Ali is a partner/executive director in the Tax Consulting division of Pitcher Partners. He joined Pitcher Partners in 2000 and has gained over 15 years experience in the areas of corporate taxation and the taxation of trusts. Recent experience includes advice on business structures, income tax consolidation, company liquidations, employee incentives and research and development tax concessions. Ali has advised on a broad range of tax issues to a large number of clients across a range of industries. Industry Experience Throughout his career Ali has gained significant experience providing tax advice to clients within the property, technology, manufacturing and retail sectors. Areas of Expertise Tax consulting and compliance: corporate tax and trust taxation Capital gains tax Research and development tax incentives Employee share schemes Business structures Professional Qualifications and Memberships Bachelor of Commerce (Hons) (Monash University) Master of Laws (Melbourne University) Chartered Tax Adviser (CTA) MELBOURNE SYDNEY PERTH PITCHER.COM.AU ADELAIDE BRISBANE NEWCASTLE Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.

41 PROFILE Paul Hum Senior Manager Tax Consulting paul.hum@pitcher.com.au Professional Background Paul Hum has worked for over seven years in the employment taxes advisory area gaining significant experience across a range of industries. His areas of tax expertise include employee share schemes, termination payments, fringe benefits tax, payroll tax, PAYG withholding, workers compensation and superannuation guarantee. Industry Experience Mining Car Manufacturing and Sales Financial Services Other Services Areas of Expertise Fringe Benefits Tax Payroll Tax PAYG Withholding Workers Compensation Superannuation Guarantee Professional Qualifications and Memberships Bachelor of Commerce (Accounting and Finance) Honours (University of Western Australia) Member of the Institute of Chartered Accountants MELBOURNE SYDNEY PERTH PITCHER.COM.AU ADELAIDE BRISBANE NEWCASTLE Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.

42 Pitcher the difference Pitcher Partners has the resources and depth of expertise of a major firm, but with a smaller firm feel. We give our clients the highest level of personal service and attention. That s the difference. Pitcher Partners is an association of accounting and business advisory firms located in Melbourne, Sydney, Perth, Adelaide, Brisbane and Newcastle. We have a strong reputation for providing personal service and quality commercial advice to our clients across a broad range of industries. Our clients We specialise in providing services to family controlled, privately owned and small public businesses as well as high net worth individuals, the public sector and Not for Profit organisations. Our clients require high technical standards, matched with a personal understanding and involvement in their affairs. 27,000+ $3.6bn Partners and staff globally Billion worldwide revenue 2014 (USD) 93 1,000+ Partners nationwide People nationally Countries Firms worldwide Independent member of the Baker Tilly International global network Pitcher Partners services Investment Advisory Audit and Assurance Private Clients Business Advisory Risk Services Business Recovery and Insolvency Superannuation Consulting Group Taxation Corporate Finance

43 Audit and Assurance The cost and effort of compliance with financial regulations is an increasing burden on business. We believe audit and assurance should add value to the organisation by identifying opportunities as well as risks. Furthermore, we understand the importance of working closely with Boards of Directors and Audit Committees to resolve audit issues within the agreed timeframe and work to deliver a truly value added service. Business Advisory Through close and active involvement in our clients business, Pitcher Partners provides informed, practical assistance to make the most of opportunities and emerging issues. We ensure the advice we give is practical and takes into account the full set of circumstances facing the company. Business Recovery and Insolvency Even the healthiest business will come into contact with an insolvency situation at some time. It could be one of your suppliers, or perhaps a problem debtor. Pitcher Partners has developed a reputation for providing organisations with a range of Business Recovery and Insolvency services that are successful in achieving maximum recovery levels. Consulting Group Our consultants work collaboratively with senior management and stakeholders to deliver measurable outcomes. We use approaches and methodologies in the conduct of assignments that are founded and renewed on leading edge thinking, whilst maintaining commercial relevance and practicality. Areas of expertise include strategic business planning, feasibility studies, viability studies, contract negotiations, financial analysis and modelling, tailored IT solutions and organisational reviews. Corporate Finance Corporate transactions are not an end in themselves, but part of the progress towards a goal be it growth, higher profitability, improved market share or competitive advantage. Pitcher Partners has extensive experience providing independent advice on investments and business transactions. We work quickly, providing excellent response and value for money. Investment Advisory We provide our clients with rigorously researched and customised investment advice suitable to the needs, objectives and risk profiles of each individual family, fund or Not for Profit organisation. At Pitcher Partners we offer clients fee only service that is truly independent. Private Clients We have an in-depth understanding of the profit drivers and key performance indicators for private businesses as well as the commercial and business imperatives underpinning their success. We have a full view of our client s financial situation including both business and personal affairs as well as an understanding of the ramifications of legislative changes. Our complete service approach means we can provide business related advice to take account of personal long-term goals as well. Risk Services We are able to undertake a broad range of risk management services to support our audit efforts including enterprise risk management, internal audit, disaster recovery and business continuity planning, advanced data mining and specialised information technology security assurance. Superannuation We also have extensive experience in the superannuation industry, working with trustees, members and employers. Our experience covers all segments of the industry: large fund compliance, self- managed funds, administration, employer obligations, member retirement planning and estate planning. Taxation Pitcher Partners is one of the most experienced taxation advisory team in Australia outside the Big 4 accounting firms. We have specialists in all relevant areas of taxation law supported by a large team of experienced professionals who can manage any issue regardless of size or complexity.

44 Frequently asked questions The Critical Point Network provides personal and professional support for accounting and legal practitioners in Australia. WHAT SUPPORT WILL I RECEIVE? Membership entitles you to: Specialist skills to help you meet your clients expectations in areas that are outside your immediate field of expertise or experience Technical updates, public practitioner seminars, briefings, conferences, discussion forums, quarterly newsletters and regular bulletins to help keep your technical skills up-to-date and provide you with ideas to improve your own work practice, some of which are complimentary Networking functions which provide you with the opportunity to keep abreast of current issues and share ideas with fellow members Access to one of Australia s most respected and successful Business Advisory and Assurance Practices the Pitcher Partners Association with firms in Melbourne, Sydney, Perth, Adelaide, Brisbane and Newcastle Access to our global network of independent firms through Baker Tilly International WHAT WILL IT COST? There are no initial or ongoing membership fees or costs. WHAT ABOUT MY CLIENT RELATIONSHIPS? When working with you, we promise to provide you with the expertise and resources you require to service your client s needs. When working with you, we will work to enhance your relationship with your client. We promise not to poach a client that you introduce to us. WHO IS PITCHER PARTNERS? Pitcher Partners is an association of independent accounting firms, located in Melbourne, Sydney, Perth, Adelaide, Brisbane and Newcastle with 110+ partners and more than 1,200 professionals located around Australia. Since 1991 Pitcher Partners Melbourne has grown to become the leader in our market and the fifth largest Melbourne based accounting firm with 45 partners and more than 600 professional and support staff. This means we are large enough to have technical depth and breadth. WHAT IS THE RELATIONSHIP BETWEEN PITCHER PARTNERS AND THE CRITICAL POINT NETWORK? The Critical Point Network was created and is supported by Pitcher Partners and is a registered trademark and a business of Pitcher Partners Advisors Proprietary Limited ABN HOW MANY MEMBERS ARE CURRENTLY IN THE CRITICAL POINT NETWORK? The Critical Point Network operates Australia-wide and has over 3,000 members. Gess Rambaldi, a Partner/Executive Director with Pitcher Partners Melbourne, is the National Chairman and the Chairman of the Victoria, Tasmania and Albury division which has over 2,000 members alone. DOES THE CRITICAL POINT NETWORK SERVICE REGIONAL MEMBERS? The Critical Point Network has a large proportion of its members in regional Australia. It provides regional presentations and extends invitations to all members, city and regional, for all Critical Point Network events.

45 IF I NEED SPECIALIST ADVICE WHAT DO I DO? a CPN Specialist Query Service Form to cpn@pitcher.com.au. All members must forward the CPN Specialist Query Form prior to contacting the firm in relation to any query. The form is available to download from WILL I RECEIVE A BILL FOR A QUICK ENQUIRY? No, we have a 10 minute complimentary limit which means that if the enquiry can be answered within 10 minutes, there is no charge. Alternatively, if your query does take longer than 10 minutes, there is a charge. For further information on the relevant charges, please contact cpn@pitcher.com.au. Insolvency related enquiries will not attract a charge for initial consultations, even if they extend well beyond 10 minutes! ARE THERE ANY RESTRICTIONS ON MEMBERSHIP? The services offered by the Critical Point Network are ideally suited to an accountant or legal practitioner. WHAT HAPPENS UPON JOINING? Once becoming a CPN Member you will receive a Members Welcome Pack via . The Members Welcome Pack will include everything you need to know about being a Critical Point Network member along with a full list of benefits. If you prefer, we would also be pleased to meet you and explain some of these great benefits. WHAT DO I DO IF I NO LONGER WISH TO REMAIN AS A MEMBER? Just let us know by pressing the unsubscribe button on any CPN communication that you receive from us or by dropping us a note. No questions asked. WHEN DID THE CRITICAL POINT NETWORK FIRST START? The first official Critical Point Network event was our Professional Advisors Conference held in May WHAT IS THE SECRET TO THE CRITICAL POINT NETWORK? Simple - it has full partner support and has evolved to effectively cater for members growing needs. WHAT DO I NEED TO JOIN? Joining is easy. Do one of the following: your membership application form and/or details to cpn@pitcher.com.au Post to: Critical Point Network, Pitcher Partners, GPO Box 5193, MELBOURNE VIC 3000 Give any Pitcher Partners person your business card or details and tell them that you would like to join the Critical Point Network Gess Rambaldi Critical Point Network Chairman gess.rambaldi@pitcher.com.au Andrew Yeo Partner/Executive Director andrew.yeo@pitcher.com.au David Vasudevan Partner/Executive Director david.vasudevan@pitcher.com.au

46 Specialist query form PLEASE COMPLETE YOUR DETAILS Firm: Phone: Name: QUERY Tax GST Land tax Stamp duty International Consolidation Employment taxes Division 7A Employee share schemes Research and development Growth areas infrustructure contribution Fuel tax credits Not for profit Income tax/ CGT General advice Other: Superannuation Business advice Investment advice Succession planning Estate planning Forensic evaluations Information technology Corporate transactions Audit Valuations Financial Modelling M&A advisory Insolvency: Bankruptcy & Personal Insolvency Arrangements Voluntary liquidation Voluntary administration Receiverships Turnaround Management Negotiations with banks and other creditors Asset Protection General advice Supporting information: Please provide as much detail as possible to ensure appropriate allocation. (Please attach additional information if necessary): Time frame for response: Please highlight a realistic timeframe that will enable us to provide advice within a suitable and timely manner. Please note given conflicting demands with our senior personnel, we will endeavour to respond to you within the nominated time frame. If you require an urgent response, please contact us via cpn@pitcher.com.au or Within 2 Business Days Within 5 Business Days Within 10 Business Days What will it cost? We are happy to answer your queries and there is no charge if the time required to respond to the query takes 10 minutes or less. Should the query require more than 10 minutes to respond we will provide an estimate of the costs for approval and authorisation before proceeding with the assignment. Please note that for insolvency related queries, CPN members will not be charged for the enquiry and you are still encouraged to call or any of the insolvency partners for advice. All queries should be forwarded by to cpn@pitcher.com.au or by fax to Upon receipt of this form, the appropriate specialist will be contacted to deal with your query. Advice regarding our ability to respond in the time frame specified will be provided as soon as possible.

47 Membership application form PLEASE COMPLETE AND RETURN THIS FORM TO JOIN THE CRITICAL POINT NETWORK Title: Firm name: Position held: Mailing address: Telephone: Full name: Facsimile: Please indicate the member services you wish to receive: Trading board Technical bulletins CPN Newsletter (quarterly) Networking events Do you have any special interests? If so, what are they? Fishing Wine tasting Rugby League/ Union AFL Do you follow an AFL football team? Yes I follow Professional events Access to advice Other: No Are you: An accountant in public practice A solicitor in public practice A barrister An accountant in industry A solicitor in industry Other (please explain): Do you have any preferred area of specialisation or particular interest? How did you find out about the Critical Point Network? Referred by: Other: What happens upon joining? Once becoming a CPN Member you will receive a Members Welcome Pack via . The Members Welcome Pack will include everything you need to know about being a Critical Point Member, along with a full list of benefits. Some of these include invitations to CPN events, our quarterly CPN Newsletter and regular technical bulletin updates. If you prefer, we would also be pleased to meet with you and explain some of these great benefits. Please complete and return this form: Post to: Critical Point Network, Pitcher Partners, GPO Box 5193, MELBOURNE VIC cpn@pitcher.com.au or via Fax: To unsubscribe, please select the unsubscribe button on any CPN communication or cpn@pitcher.com.au.

48 Get in touch... To obtain further information on this presentation topic please contact: Ali Suleyman Partner/Executive Director - Tax Consulting ali.suleyman@pitcher.com.au Paul Hum Senior Manager - Tax Consulting paul.hum@pitcher.com.au For all other Critical Point Network or consulting enquiries please contact: Gess Rambaldi Critical Point Network Chairman gess.rambaldi@pitcher.com.au Andrew Yeo Partner/Executive Director andrew.yeo@pitcher.com.au David Vasudevan Partner/Executive Director david.vasudevan@pitcher.com.au Crawford Ross Critical Point Network Manager crawford.ross@pitcher.com.au Garrett Kinchington Critical Point Network Coordinator garrett.kinchington@pitcher.com.au PITCHER.COM.AU/CRITICALPOINTNETWORK Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Critical Point Network is a business of Pitcher Partners Advisors Proprietary Limited ABN Critical Point Network is a registered trademark.