Employment Tax Case Studies

FBT and Policy Development

Many businesses incur a substantial fringe benefit tax (FBT) liability due to operational requirements that necessitate a vehicle fleet. A large fleet does not necessarily have to result in large FBT costs. We were approached by one of our clients who was concerned with the size of their FBT liability, particularly in relation to employee on-call arrangements.

Such employees were using their vehicles for home to work use when on call which, as a result of strict Australian Tax Office interpretation, creates an FBT liability. Taking into account business issues, we recommended the client replace current sedans with modified vehicles that qualified for an FBT exemption. The change resulted in FBT savings and reduced vehicle capital costs.

Payroll Tax and Cost Reduction

Payroll tax regularly slips under the guard of the most thorough Tax Manager. A complete understanding of the various exemptions and State differentials requires more than a 'once a year' review. A client's Tax Manager informed us that he did not have complete confidence in his payroll processes.

After performing a high level review, we identified the incorrect inclusion of termination payments which had resulted in an overpayment of payroll tax of $400,000. Accordingly, a payroll tax refund request was lodged shortly after.