What You Need to Know About the ATO’s Current Focus
The Australian Taxation Office (ATO) has ramped up its focus on Fringe Benefits Tax (FBT) compliance for 2025. Here’s what your business needs to know.
Random Compliance Checks Continue
The ATO’s random enquiry program is actively requiring employers to demonstrate compliance with FBT, PAYG, and superannuation obligations. Is your documentation ready?
Recent Changes You Should Know
✅ Simplified Record-Keeping
Since April 1, 2024, you can use existing corporate records instead of separate travel diaries and declarations for certain fringe benefits—streamlining your compliance process while still meeting ATO requirements.
⚡ Electric Vehicle Updates
-
Zero-emission electric vehicles remain FBT exempt (if they meet criteria)
-
Important change: The FBT exemption for plug-in hybrid vehicles ended on April 1, 2025
-
Remember: All vehicle benefits must still be reported as “reportable fringe benefits” on employee payment summaries
What’s Under the Microscope?
🚗 Vehicles and Car Benefits
-
Novated leases face continued scrutiny
-
“Workhorse/Dual cab” vehicle exemptions are being closely examined
-
Private use rules are being strictly enforced
🍽️ Entertainment Benefits
Meals, event tickets, and alcohol continue to be carefully monitored for proper FBT treatment.
💰 Expense Payments
Employee costs like health insurance premiums and home internet remain under review.
Non-cash benefits like housing and gifts require proper documentation.
Common Mistakes to Avoid
The ATO has specifically highlighted these frequent errors:
-
Incorrect vehicle classification
-
Misclassifying private use as business use
Remember: Home-to-work travel, lunch trips, and school pickups are all private use
-
Insufficient logbook detail
Simply writing “business” as the journey purpose isn’t sufficient for the ATO
-
Logbook distances not matching mapping tools
The ATO is cross-checking with Google Maps
Car Parking Clarifications
The ATO continues to enforce its guidelines on what constitutes a commercial parking facility, looking at signage, access controls, and pricing structures.
What Your Business Should Do Now
-
Review and document all fringe benefits
-
Update your record-keeping systems
-
Check vehicle exemption eligibility after recent changes
-
Mark your calendar: FBT returns due May 21st (or June 25th for electronic lodgements)
Need guidance with your FBT compliance?
Our team of experts is ready to help ensure your business stays compliant while maximising available concessions.
Contact us Today | Book a Consultation
This newsletter contains general information only. Professional advice should be sought before making any decisions based on this content.
