Fringe benefit tax (FBT): Calculating fringe benefit tax
If you realise you've made a minor error or errors in a FBT return you've filed, you may be able to correct it in:
- the next taxable period, or
- the same taxable period by writing to us with the details.
Please call us on 0800 377 774 to discuss your situation.
Making the correction in the next taxable period
The error can be corrected in the next taxable period after the discovery of the error when:
- you have sent us a return that contains an error, and
- the error was caused by a clear mistake, simple oversight, or mistaken understanding on your part, and
- the total discrepancy in the assessment that is caused by the error is $500 or less.
So, if you haven't claimed an expense for FBT in one taxable period you can claim it in a following taxable period provided the criteria above are met.
Records you must keep
You must record these details in your FBT paperwork and make them available if we ask for them:
- the return period the error occurred in
- the FBT amount involved
- the type of error
- the FBT return period the correction was made.
Keep a copy of all returns that you send to us. This will help if you need to make changes to a return and substantiate what you have done.
Amending an assessment to correct an error
In some instances, you may be able to ask the Commissioner to amend an assessment to correct the error. If, for example:
- the amount of the adjustment is above the threshold for making the adjustment in the next return period
- we advised you that you couldn't deduct the expense in the earlier period, or
- we are investigating this earlier period.
Send us the following details:
- the FBT taxable period the error occurred in
- the FBT amount involved and what the amended figures should be
- the type of error and why the change is needed.
Disputing an assessment
If you've chosen a particular tax position and then change your mind about it, you can't correct it. Instead you must use our disputes process, which means completing a Notice of proposed adjustment (IR770) and sending it to us no later than four months after we receive your FBT return. You can get a IR770 from "Forms and guides".
For more information on disputing an assessment see our factsheet If you disagree with an assessment (IR778). You can get one from "Forms and guides".
Please do not send us an amended FBT return.
Where the reassessment is an amount to pay and it's over $100 we'll charge you use-of-money interest.
But, if the amount reassessed is a refund over $100, we'll pay you use-of-money interest.
We may ask for more information to consider if we'll charge a shortfall penalty.
Find out more
- How interest is calculated
- Credit and debit rates for use-of-money interest
- Section 113A of the Tax Administration Act 1994
- Standard practice statement SPS07/03 - Requests to amend assessments
- Tax Information Bulletin Vol 19, No 5, June 2007
Date published: 20 Sep 2010
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