FBTnews - 2008
Issue 24 December 2008
In this issue:
- Filing online
- Reminders
- Not sure which return to use?
- GST on fringe benefits
- FBT prescribed rate on low-interest loans
In this issue we look at filing online, using the correct return, GST on fringe benefits, and the prescribed rate on low-interest loans.
If you have an FBT topic you'd like to see covered in this newsletter, please write to the Editor, FBT News, PO Box 2198, Wellington 6140 or email us at fbt.news@ird.govt.nz and we'll aim to cover it in a future edition.
Filing online
The easiest and most secure way for you to file your FBT return with us is to file it online through our website. Go to"Get it done online", then click on "Fringe benefit tax (FBT)" and you'll find the option to file your annual, income year, or quarterly return.
You don't need a user ID or password either - just the 14-digit figure (DLN number) at the top of the paper return we send you, or you can call us on 0800 377 772 and we can supply you with a DLN number.
Once you've completed the return you'll also need to print off a copy, sign it and keep it for your records.
Reminders
- Calculate FBT on whole dollar amounts only.
- When completing your FBT quarterly return (IR 420), you only need to fill in:
- Part B, Box 4 for quarters ended 30 June, 30 September and 31 December, and
- Part C, Box 5 for quarters ended 31 March.
Your FBT quarterly return (IR 420) for December 2008 is due on Tuesday 20 January 2009.
Not sure which return to use?
If you're in our large employer category (your annual PAYE and ESCT (formerly SSCWT) deductions are more than $100,000), you must file a quarterly return:
- Quarterly returns are automatically allocated when you register as an employer unless you choose to use a different filing option. Quarterly returns can be used by all employers for fringe benefits provided to both ordinary employees and shareholder-employees.
If you're a small or medium employer (your annual PAYE and ESCT (formerly SSCWT) deductions are less than $100,000), you can file a quarterly return (as above), an annual return or an income year return:
- Annual returns cover the period 1 April to 31 March and the return and payment is due on 31 May. Annual returns can be used by all employers (including companies).
- Income year returns are for companies only. This return can be used where shareholder-employees receive benefits. It shouldn't be used for benefits received by ordinary employees. The income year covers the accounting year of the company and the due date for the income year FBT return is the same as the company's end-of-year tax due date. This allows for any adjustments needed as part of preparing the company's annual income tax accounts.
GST on fringe benefits
We've noticed some employers are still having problems calculating the GST on fringe benefits adjustment. These include calculating the GST in the incorrect box on the FBT return, or using the value from the correct box, but multiplying it by 12.5% instead of dividing the value by 9. If you've made GST adjustments on your FBT returns, please double-check your GST calculation.
Calculating the GST adjustment
Example
| Step Amount | ||
|---|---|---|
| 1 | $500 |
Take the total taxable value of all benefits from Box 3 on your FBT return. Taxable value shown in Box 3 should be GST-inclusive value. |
| 2 | less $150 = $350 |
Subtract the value of any benefits which are GST-exempt supplies (eg, low interest loans, other financial services, contributions to employee superannuation and life insurance policies), or zero-rated supplies (eg, international travel). |
| 3 | $350 9 = $38.88 |
Divide the resulting total by 9. This is the GST adjustment. |
If your calculation was incorrect
If you find an error after you've checked your GST adjustment calculation call us on 0800 377 772 and tell us the correct amount.
In most cases, we can amend the return while you're on the phone and tell you if:
- you have a new amount payable, or
- are due a refund.
We'll set a new due date for any extra tax payable and you won't get late payment penalties if you pay on time, but you may be liable for UOMI (use-of-money interest).
FBT prescribed rate on low-interest loans
The rate for calculating FBT on low-interest, employment-related loans for the quarter beginning 1 October to 31 December 2008 is 10.90%.
Alan Quinn
Manager
Customer Insight
Wishing you a safe and happy holiday season
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Date published: 15 Dec 2008
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